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A gang of eight suspected of ripping off the Philippines' main phone company and its customers of millions over the last six years have been arrested by local authorities.

The Manila-based syndicate allegedly exploited security loopholes to obtain free access to telephone calls at the expense of customers of the Philippine Long Distant Telephone (PLDT). The process - known as phone phreaking - involves electronic manipulating phone systems, normally by sending additional control codes down phone lines. The gang is accused of reselling this free access for illicit gain.

The scam came to light only after PLDT's business customers complained of rogue calls on their bills. Most of the illegal calls were made to the Middle East, where many Filipinos work. Reuters reports that PLDT went to the "military, police and immigration officials", after tracing the illegal calls back to the eight suspects. PLDT reckons it has lost $3.5m since 1998 because of cyber criminals hacking into its subscribers' PABX system. The Manila Eight are prime suspects.

Air Force Chief Lieutenant General Jose Reyes said the gang (two Indian nationals, a Bangladeshi and five Filipino accomplices) are suspected of illegally tapping into the Philippine Long Distant Telephone (PLDT) company's system since 1998. The eight were rounded up in raids in Manila last week.

"They have deprived the government of nearly 20 million pesos [$357,000] in expected revenues," Reyes told reporters, adding that syndicate's alleged crimes were tantamount to economic sabotage. ®

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