The Department of Justice this week accused a total of 61 individuals and entities for their presumed involvement in a call center scam targeting tens of thousands of individuals in the United States.
Law enforcement arrested 20 individuals in the US related to the fraudulent scheme. An additional 32 individuals and five call centers in India were charged for their alleged involvement. Moreover, a U.S.-based defendant is currently in the custody of immigration authorities, DOJ announced.
On Oct. 19, 2016, a grand jury in the U.S. District Court for the Southern District of Texas returned the indictment. Charges include conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering, DOJ says. One of the defendants was separately charged with passport fraud, the announcement.
The defendants were allegedly involved in a sophisticated fraud scheme, and investigators believe that conspirators in India, including a network of call centers in Ahmedabad, India, were behind it. Based on information gathered from data brokers and other sources, operators allegedly called potential victims and impersonated officials from the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services.
The indictment claims that the call center operators threatened potential victims to pay taxes or penalties, telling them they would be arrested, imprisoned, fined or deported. When the victim agreed to pay, the call centers would use “a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible.”
The perpetrators did the laundering by purchasing prepaid debit cards or through wire transfers, and were often registering the prepaid debit cards “using misappropriated personal identifying information (PII) of thousands of identity theft victims,” DOJ says. Fake names and fraudulent identifications were used to direct the wire transfers.
“Hawalas” were allegedly used to transfer money internationally outside of the formal banking system, to direct the extorted funds to the accounts of U.S.-based individuals. While these individuals did expect the hawala transfers, they weren’t aware of the illicit nature of funds, the indictment reveals. Apparently, the co-conspirators kept a percentage of the proceeds for themselves.
“According to the indictment, one of the call centers extorted $12,300 from an 85-year-old victim from San Diego, California, after threatening her with arrest if she did not pay fictitious tax violations. On the same day that she was extorted, one of the U.S.-based defendants allegedly used a reloadable debit card funded with the victim’s money to purchase money orders in Frisco, Texas,” the DOJ notes.
The defendants are also believed to have extorted $136,000 from a victim in Hayward, California. They called the victim multiple times over a 20-day period, claiming to be IRS agents and demanding payment for alleged tax violations. They instructed the victim to purchase 276 stored value cards which they transferred to reloadable debit cards and some of the cards were activated using stolen PII from US- based victims.
Alternative fraudulent schemes were also used, where operators would offer small short-term loans to their victims, or advised them that they were eligible for grants. Next, the conspirators would request a good-faith deposit that would prove the victims’ ability to pay back the loan, or demanded that a fee to process the grant should be paid, but the victim would never receive any money after making the requested payment.
The DOJ has created a website to provide additional information about the case.
“This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice,” said Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS OIG). “We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”