Oh man. I too have a "friend" with a similar story. Except my friend was connected to a pay phone line at a nearby store and managed to route the line all the way into his bedroom via existing unused pairs along the way. All so that he could dial into long-distance BBSes. (Because there were none locally.)

Eventually the phone company caught on and probably _could_ have charged my friend with theft of services or something, but instead just disconnected the rogue line and put a lock on the payphone interface box and placed a large "property of the telco" sticker on it. Probably dodged a significant bullet there, in retrospect.