Three weeks after authorities in India disrupted a major phone fraud ring in Mumbai, the Department of Justice has indicted 61 people in relation to the scam, which officials say generated as much as $150,000 per day.
The indictments are the result of investigations involving U.S. and Indian authorities and the phone fraud scheme affected tens of thousands of victims in the U.S. alone, the Justice Department said. Twenty suspects were arrested Thursday in connection with the case, and five call centers and 32 people in India also were charged.
The scam that these suspects allegedly were involved with is the long-running IRS tax scam in which criminals call victims and impersonate IRS agents. They tell victims they have unpaid taxes and will be arrested soon if they don’t pay the taxes immediately. They then bully the victims into buying prepaid debit cards or sending money through wire transfers to pay the imaginary debt. The scam is made more believable through the use of caller ID spoofing, so victims see a legitimate IRS 800 number coming up on their phones.
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world.”
Authorities in India arrested dozens of people in connection with the scheme earlier this month and alleged that they were running the criminal enterprise out of several call centers near Mumbai. But many of the victims are in the U.S., so American law enforcement agencies have been involved along the way, as well.
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” said Kenneth Magidson, U.S. Attorney for the Southern District of Texas. “We are extremely vigilant when the names of U.S. government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
The Justice Department said in a statement that the suspects were part of a distributed criminal organization that included the call center employees, money mules, and many others in several countries.
“The co-conspirators allegedly used ‘hawalas,’ in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves,” the statement says.
“The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that the conspirators would then request a good-faith deposit to show the victims’ ability to pay back the loan, or payment of a fee to process the grant. The victims of the alleged scam never received any money after making the requested payment.”
The indictment, unsealed Thursday, also alleges that the suspects were involved in other scams, including one that targeted immigrants and threatened them with deportation unless they paid back taxes.
Image from Flickr stream of Michael Coghlan. CC BY-SA 2.0 License.