Three men were arrested at the Apple store in on Monday in connection with an iPhone "gaming" scam, according to the .
The nationwide crime trend involves individuals who purchase several iPhones at a discounted cost with no intent to fulfill the 2-year service contract, leaving wireless service providers with millions in monetary losses, authorities said.
"There's a trend happening where suspects are recruiting people -- often local transients -- and taking them to the Apple store in Cerritos and having them purchase as many iPhones as they can," said Cerritos sheriff's Det. Aaron King.
The iPhones, which are purchased from Apple by AT&T and Verizon for $600, are sold to consumers at a discounted price of $200 with a 2-year service agreement. The service providers eventually profit from this agreement over the span of the contract. But when it comes to the "gaming" scam, these contracts are never fulfilled and instead the iPhones are often reprogrammed and resold, leaving wireless service providers with an immediate $400 loss in addition to a broken contract and unpaid wireless bills, the detective said.
"These individuals are being recruited to buy the iPhones for $200, while sacrificing their credit to get the phones, in return for a cash payment," King said.
A series of the "gaming" scam was unveiled in Cerritos over Memorial Day weekend when the Cerritos deputies received a call at about 5:30 p.m. Saturday from a man who claimed he was the victim of a failed business transaction at the Cerritos Apple store, according King.
Domingo Rios, 35, of Long Beach, told deputies that he had agreed to purchase five AT&T contracted iPhones for a man -- later identified as Gerald Blockmon, 21, of Venice -- in return for $150 cash, but he was not properly paid.
On Memorial Day, Rios again contacted the Cerritos Station stating that Blockmon was back at the Apple store conducting a similar transaction with another recruited purchaser, later identified as Walter Staten, 63, of Compton.
Responding deputies arrested Blockmon, Rios and Staten about 3:45 p.m. Monday for conspiracy to commit grand theft and commercial burglary, according to King. At the time of the arrest, Staten was also found with heroin in his pocket, the detective added.
Apple store employees say Blockmon -- considered the "ringleader" of this local scam -- is in the Los Cerritos Center location almost daily, King said. It is unclear how many other similar transactions he may have been involved in.
A representative from Verizon told King they intend to move forward in the case against Blockmon and Staten, who was referred to as a "credit mule."
"They're not only putting their credit on the line, they're also defrauding the service providers, who are suffering huge losses," King said.
AT&T and Verizon representatives say the "gaming" scam is a growing problem that has already resulted in millions of losses to the businesses.