Jan. 12, 2006 -- Federal agents have launched an investigation into a surge in the purchase of large quantities of disposable cell phones by individuals from the Middle East and Pakistan, ABC News has learned.
The phones -- which do not require purchasers to sign a contract or have a credit card -- have many legitimate uses, and are popular with people who have bad credit or for use as emergency phones tucked away in glove compartments or tackle boxes. But since they can be difficult or impossible to track, law enforcement officials say the phones are widely used by criminal gangs and terrorists.
"There's very little audit trail assigned to this phone. One can walk in, purchase it in cash, you don't have to put down a credit card, buy any amount of minutes to it, and you don't, frankly, know who bought this," said Jack Cloonan, a former FBI official who is now an ABC News consultant.
Law enforcement officials say the phones were used to detonate the bombs terrorists used in the Madrid train attacks in March 2004.
"The application of prepaid phones for nefarious reasons, is really widespread. For example, the terrorists in Madrid used prepaid phones to detonate the bombs in the subway trains that killed more than 200 people," said Roger Entner, a communications consultant.
150 Phones in One Sale, 60 Phones in Another
The FBI is closely monitoring the potentially dangerous development, which came to light following recent large-quantity purchases in California and Texas, officials confirmed.
In one New Year's Eve transaction at a Target store in Hemet, Calif., 150 disposable tracfones were purchased. Suspicious store employees notified police, who called in the FBI, law enforcement sources said.
In an earlier incident, at a Wal-Mart store in Midland, Texas, on Dec. 18, six individuals attempted to buy about 60 of the phones until store clerks became suspicious and notified the police. A Wal-Mart spokesperson confirmed the incident.
The Midland police report, dated Dec. 18 and obtained by ABC News, states: "Information obtained by MPD [Midland Police Department] dispatch personnel indicated that approximately six individuals of Middle-Eastern origin were attempting to purchase an unusually large quantity of tracfones (disposable cell phones with prepaid minutes attached)."At least one of the suspects was identified as being from Iraq and another from Pakistan, officials said.
"Upon the arrival of officers, suspects were observed moving away from the registers -- appearing to evade detection while ridding themselves of the merchandise."
Other reports have come in from other cities, including Dallas, and from authorities in other states. Authorities in Pennsylvania, New York and other parts of Texas confirmed that they were alerted to the cases, and sources say other jurisdictions were also notified.
The growing use of the throwaway cell phones has been cited by President Bush as an important justification for expanding the wiretap laws under the Patriot Act.
"Law enforcement officials can now use what's now called roving wiretaps, which will prevent a terrorist from switching cell phones to get a message out to one of his buddies," Bush said on April 20, 2004.
Legitimate Uses May Have Spurred Sales, Too
Law enforcement sources say it is possible some large purchases that have been identified as being sent to the Middle East could have been sent for resale in a sellers' market for handsets, or simply given to friends and relatives. Officials are also investigating these possibilities.
Managing the complex balancing of these two issues -- significant and legitimate uses and their potential for misuse has been an ongoing dilemma for law enforcement.
For now, both intelligence officers and bomb technicians have been monitoring reports of large-quantity purchases.
Some such purchases may have innocent explanations, but even law enforcement officials themselves say disposable phones are sometimes their own phones of choice when operating in hostile environments. The CIA recently used them in a kidnapping in Milan, Italy. Italian authorities were able to track the telephones. But they mostly tracked them to a dead end -- the false identities in which they were purchased.
Possible purchasers of disposable cellular phones could also include political extremists, terrorist supporters, sympathizers or others simply shaken by the recent revelations of the spy agency's widespread monitoring of calls, including calls to and from the United States to foreign countries.
Police Report Identifies Terror Links
In the Midland, Texas, arrest report, police also identified the individuals as linked to a terror cell:
"Evasive responses provided by the subjects, coupled with actions observed by officers at the onset of the contact prompted the notification of local FBI officials to assist in the investigation," the report said. "Upon the arrival of special agents, and as a result of subsequent interviews, it was discovered that members of the group were linked to suspected terrorist cells stationed within the Metroplex."
Law enforcement officials have not elaborated on the information in the report or specified which terrorist group the individuals were allegedly linked to.
In addition, special agents reported that similar incidents centering on the large-scale purchases of tracfones had been reported throughout the nation -- identifying individuals of Middle-Eastern descent as the purchasers."
ABC News is working to confirm the details in the police report.
"Upon conclusion of the initial investigation, three of the suspects were taken into custody on immigration violations, with one individual arrested for possession of marijuana -- the drug having been discovered during the search of the group's vehicle. Also found within the green 2002 Kia van were additional cell phones, the total believed to be approximately 60."
FBI officials told ABC News that while the cases may wind up in the hands of Immigrations and Customs Enforcement, the FBI would benefit from any intelligence gleaned and would take the lead if a solid terrorist connection emerged.
ABC News' Jill Rackmill contributed to this report.