Police have shut down a global iPhone scam that was costing the mobile operator O2 over £1m a month.
Nine people accused of coordinating the sophisticated operation have been arrested on suspicion of conspiracy to defraud in a series of early morning raids.
They followed an investigation into a rapidly growing criminal conspiracy profiting from the theft and illegal use of almost 1,000 iPhones.
Police were called in after mobile phone company 02 watched the scam spiral out of control, with £1.2m stolen through premium phone lines in July alone.
Sim cards were being shipped abroad and plugged into automatic dialling machines calling lines that charge up to £10 a minute.
The bills were settled immediately by O2 but never repaid by their "ghost" owners.
The handsets were sent to criminal contacts overseas, where they can fetch up to £450 each, as mobile phone companies are unable to block them.
Police arrested several alleged members of the premium phone line gang, all of whom are of Pakistani origin, at homes in Forest Gate, Southall and Southend.
They are suspected of setting up shell companies to launder the profits from the premium phone lines and to hide their identities.