So what’s the SD on Arabic people and cell phones? Those 3 guys from Texas who were briefly held on terrorism charges (and since released) supposedly went to Michigan to buy Tracfone pre-paid cell phones at Wal-Mart, for resale back in Texas. A check of the Wal-Mart web site shows the price of these phones to be essentially the same all over the USA. So it seems to me there could have not been enough profit involved to even pay the expense of going that far to buy the phones. Yet part of their story was that they could have resold them in Texas for almost twice what they paid for them, and that this kind of dealing is fairly common practice within Arab communities. Are there that many people around who do not want to go to Wal Mart and buy the phones themselves and who would be willing to pay that much?
From the wikipedia…Bulk Buying Loophole and Terrorism allegations
For several years Tracfone has had the problem of its heavily subsidized handsets being bought and resold in bulk. In a common practice handsets are bought in large quantities, the airtime is legally harvested by removing the sim card and the handsets are sold to bulk resellers. The bulk reseller can sell the parts such as the battery and charger legally, but may commiting an illegal act if they manipulate the internal software and “unlock” the handset.
The practice has become so widespread that Tracfone has attempted to place additional exclusive locking software on its handsets last year, and in February 2006 Tracfone began suing one large bulk reseller, Sol Wireless Group, on the basis of a claimed DMCA violation. [3]
Despite the lock on the handset, the transferable calling credits and battery are often worth twice the puchase price.
In early August 2006, during a heightened level of fear over the UK Bombing plot and a particularly favorable promotion by Tracfone, two groups of Arab men who had been bulk buying for resale were arrested. Although the men indicated they were reselling the phones for profit, police arrested them for suspicion of terrorist activities. After determining there was no basis for suspicion of terrorism, the FBI pulled out of the case on the first day. Local prosecutors announced that they also had no basis for terrorism charges and dropped plans to prosecute within a few days.
Reporting on the cases was characterized by a good deal of commentary and misinformation. It first apparently illustrated the benefit of racial profiling yet later showed its dangers and misapplication.