Detroit used to be the international cell phone trafficking capital of the world.
But after several high-profile federal busts in the Motor City, traffickers have moved on. Rob Wolchek went to southern California to see how the billion-dollar tech trafficking business has evolved.
He came back with undercover video of an international cell phone trafficking operation.
Job-seekers are lured in by simple want ads and are tricked into doing the dirty work for greedy businessmen here in the United States - overseas to the international black market.
It's 2:06 and Jaime the henchman is at work. His job is picking up people who think they've just landed a secret shopper position with a company called Cell Wholesale in southern California.
The company claims it's a family owned business. There's Jaime on the web page along with fellow team member Chris.
Chris picks up people who answer the ads as well and takes them to phone stores. Lots of phone stores.
Chris and Jamie wait outside as the new employees go into several phones stores and sign long-term contracts to obtain new iPhones.
According to this lawsuit filed by Sprint against Cell Wholesale, the people are told to use their real names and credit info.
The company says it will cancel the contracts and it won't affect their credit. But they don't.
The only reason you get a new phone cheaply is because you sign a service contract.
But Sprint says Cell Wholesale isn't going to honor that contract because they're selling the phones in places like Hong Kong where they fetch up to $2,500 dollar per phone.
Back on the street, Chris counts up the phones his new employee has obtained so far when out he comes with another four iPhones from Sprint.
Jamie's female hire is doing great as well. The guys then take the new hires to the ATM and pay them $100 for each phone they get.
Chris' guy got nine new iPhones.
Jamie's female employee got 11 iPhones. Here she is counting out 11 $100 bills.
After dropping off the job-seekers, Chris drives to a meeting spot, gets all the phones out of the trunk and hands them off to a woman in white car who drives up next to him.
She then backs into a space at McDonald's and hands off the phones to a guy on a motorcycle.
Where do the phones go from there? Attorney Jim Baldinger who is representing Sprint in the lawsuit, has a good idea.
"They ship them overseas to be used on networks other than Sprint's network just like Jason Floarea did in Detroit," he said.
Who's Jason Floarea?
Jason Floarea is a convicted cell phone trafficker serving time in federal prison. Jason ran a company outside of Detroit that was called Ace Wholesale.
The place got raided by Homeland Security a couple of years ago.
Floarea would jailbreak the phones which renders them untraceable. He sold them in bulk to Hong Kong and made tens of millions of dollars.
A new iPhone can go for as much as $2,500. Wolchek busted Floarea and another smartphone trafficking operation in Detroit a few years ago.
"We've had a number of cases where the people who were involved with this were connected with terrorist organizations," Baldinger said.
So who's in charge of Cell Wholesale in California? His name is Hersho Barazi. He's no terrorist but he has been charged with assault with intent to do great bodily harm.
He pleaded not guilty.
So Rob Wolchek paid him a visit.
A funky-looking office in Newport Beach, California is the headquarters of Cell Wholesale. Wolchek goes inside to see if the "big cheese" is around.
The people inside say Cell Wholesale just rents space here and no one is there now, or hardly ever.
In video shot by private investigators, Barazi always seems to be messing with his phone - but he sure isn't answering any of Wolchek's calls.
But Jaime's around. He picks up a guy who answered an ad and takes him to a T-Mobile store in Irvine, California.
As Jamie leaves the ATM, Wolchek go to work.
Rob Wolchek: "Hey Jamie, what are you doing man?"
Wolchek: "Aren't you taking people around to get phones?"
Wolchek: "You're not?"
"We're just purchasing and selling phones."
Wolchek: "You're purchasing and selling phones. Who you doing it for?"
Wolchek: "What's the name of your company?"
"I can't tell you sir."
Wolchek: "Why not? Is this your company? Is that you?"
Wolchek: "So tell me a little about the business. What do you guys do?"
"Just buy and sell cell phones."
Wolchek: "Don't you guys place ads on Craiglist and people answer the ads and then you take them out to get phones?"
Wolchek: "So why are you doing that?"
"We just buy and sell cell phones."
Wolchek: "Isn't that unethical to go and grab phones? What happens to the phones?"
"They go overseas."
Wolchek: "Who sells them overseas? Barazi? Is he your boss?"
"I don't know, I just drive for the company."
Wolchek: "It says right here you're on the marketing team. What kind of marketing do you do?"
"You know, if you want me to get my lawyer here I can do that."
Wolchek: "That's great. Get your lawyer here maybe he can explain this. So what happens with the phones? Do you know where those phones end up?"
Wolchek: "You don't care if they end up in terrorist hands or do they jailbreak the phones? Who's this guy? Is this one of your guys? Fill me in a little bit.
Wolchek: "Whoa, where are you going?"
Hersh Barazi did eventually call Rob back. But only to tell him off and say to never call him again.
Sprint has shut down a number of cell phone operations around the country and has a lawsuit against the people in this story. Barazi's company is under an active investigation.