John is quite right. My step father makes a decent living re-selling Christian books (oddly enough he isn't a big Christian himself, but that was the niche market he discovered on the internet). He started out trolling through the Salvation Army and other thrift stores for books in decent shape and that had a low price (and occassionally he would find a gem, like a classic book with the authors signature inside).

Funnily enough his purchases were very much like these tracfone purchases. He'd head up to the register with dozens of books that he'd never read. Of course, books have little use for terrorists, but still the pattern is the same. This doesn't mean all bulk tracfone and other pre-paid cell phone purchases are legit, but the idea that they are automatically terror related is dopey reasoning.

You keep insisting there is something wrong here and yet can't produce anything other than speculation and supposition.

Individuals can live with/on modest profits. A couple of bucks difference--especially if multiplied by a few hundred--makes a difference in a lot of people's livelihoods. These guys aren't buying the $400 phones because they can't sell them onward. Their typical customers in the Middle East are guys who earn $200-400/month; they're Third World laborers, marginally employed people in failing economies, even students. And they're not going to pay more than $30/$40 for a phone.

If they had the money to buy a $400 phone, they'd buy them, complete with service contracts and warranties.

Immigrants don't lose their connections with home once they get to the US. They're in constant contact, through whatever media possible: e-mail, calling cards, even letters. New tech like VoIP works really well in places across South Asia, but not so well in the Middle East.

These immigrants all have relatives in business in the Middle East, mostly because business is something people can do with little capital, little real estate, little governmental interference. If a guy can corner the market on selling boxes of matches on a busy street corner in Cairo, he's got respectability and a job. Also an income.

The immigrants are also looking for ways to help their relatives. Many do it through repatriating part of their salaries. Others try to get visas for them to join them in the US (or UK, or wherever). Yet others find good business deals for Uncle Samir, whether it's in importing used cars, selling "recycled" clothing, or, gasp, cell phones.

Of course some cross legal lines. Some deal in stolen used cars. Some deal in importing drugs. Others launder money for nefarious reasons or are involved in illicit weapons sales. It's really, really hard to prevent this; much easier to stop and punish it once the guys are discovered.

I haven't noticed that the US (or any significant portion of the US population) was calling for all Brits to be given extra scrutiny when we learned that Gerald Bull was building superweapons for Saddam Hussein. Nor do I recall any great profiling effort aimed at the Irish to get control over all the NorAid fundraising that went to the IRA terrorist organization. I guess we've just been asleep at the wheel all these years.

Sure, the cell phone folks are miffed because someone takes those HIGH END, locked, heavily discounted phones that they sell with their services, unlocks them, and sells them to other people for a cut price (compared to full retail, but not that great compared to what you can get them for). Generally, what happens is that someone comes out with a trendy phone (the SLVR, for example), prices it at "$399.99," discounts it to "$299.99," then offers it for "$99.99 with a two year contract." then, after several months, they drop the "real" price to $99.99 or less, and start selling it for what it's really worth.

...but the C139 Motorola is sold all over the place, unlocked, without service, for $19.99 or so. That's reasonable, since they cost about $10 to produce (even "fancy" phones with a lot of features don't cost that much to make) - there's a $3 LCD and a $2 battery, tied together with about a dollar's worth of electronics and a $1 transformer to charge it. CompUSA sells them, as does a lot of other places.

...so, once again, what those "arbitreurs" are claiming doesn't hold water. At best, they can claim to be violating the DMCA about a thousand times with intent to sell their product to criminal enterprises. "We're innocent! We were only intending to sell to drug lords, instead of terrorists!"

Even at that, though, it would be interesting to find out how these nice, innocent men living in Texas, of Mideastern descent, got these great international sales contacts with those big criminal enterprises south of the border...