By RANDOLPH E. SCHMID Associated Press Writer

WASHINGTON (AP) -- As fast as one person can invent technology another devises ways to misuse it, says the head of an industry group that's helping equip a high-tech Secret Service lab to battle cellular phone fraud.

Fraudulent use of cellular phones cost the industry -- and hence its customers -- $482 million last year, said Cellular Telecommunications Industry Association President Thomas E. Wheeler. He said 40,000 illegal calls are made each month.

The association estimates that there are more than 25 million cellular phone customers across the country.

Industry and law enforcement officials gathered Wednesday to celebrate the donation of $50,000 worth of equipment by the association, which is also training Secret Service officers to use the equipment to track people who find ways to use cellular phones while diverting the cost to others.

``The criminal element in the U.S. and internationally is becoming more technologically advanced. ... It is critical for law enforcement to keep up,'' said Secret Service Director Eljay B. Bowron.

``We are entering the wireless century ... wireless fraud is a crime and wireless fraud is the enabler of other crimes,'' added Wheeler.

Wheeler said schemes have been developed to use phones while diverting the charges to legitimate users.

Crooks clone legitimate phones by stealing documents with code numbers or by tuning in to calls and stealing the code numbers that identify the phone and user. They can then program their own phones with these numbers, said Les Owens, the association's security chief.

Others set up unlicensed reseller services, forwarding people's calls through counterfeit phones; sell ``tumbler'' phones that test a series of code numbers until one works; or program more than one phone to use a single number.

And these phones are often used in other crimes, said Wheeler.

Owens and others were reluctant to discuss details of the schemes in use, trying to give enough information to show there is a problem without providing a manual for others to join the fraud.

Congress last year gave the Secret Service jurisdiction over fraudulent use of cellular phones, and Bowron said the agency made 161 arrests in 1994 and close to that number so far this year.

Wheeler said the industry also works with local law enforcement officials.

The problem is bigger in large markets like Los Angeles and New York, the association reported, but arrests have also been made in smaller communities such as Cheyenne, Wyo.

Owens said some phone companies are assigning customers personal identification numbers to help combat fraud, and in the future digital technology and voice prints might be used to thwart criminals.

Association spokesman Mike Houghton urged consumers to help combat fraud by keeping their phone contracts secure so no one can see the code numbers, locking the phone or taking it with them when they leave their cars and watching the bills for signs of fraudulent use.

Houghton said having a caller hang up repeatedly when the phone is answered can be a clue that someone is trying to get access to the phone's code number.

And he said criminals often hang out in airports and outside highway tunnels and listen for calls being made, since the phones transmit access codes when first dialed.

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