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    28 Oct 2016

    U.S. busts $300 million fraud ring of phony IRS callers, arrests 56

    Scammers have been pretending to be from the IRS for the past three years. A major crackdown involving call centers in India was announced Thursday.

    After all those scam phone calls -- and threats we'd be arrested if we didn't pay up -- many of us just knew that it wasn't really the IRS on the line. But who was it? And when would the authorities ever catch these jerks?
    And could somebody please make those awful calls stop?
    At last, we're hearing about a major break in the case. After a three-year joint investigation, the U.S. Department of Justice obtained an indictment involving 56 alleged fraudsters based in the United States and also five call centers in India, all accused of tricking people into paying fake tax bills either by wire or placing money on prepaid cards.
    The United States will be seeking the extradition of those based in India and warned others engaged in similar schemes.
    The indictment accuses the U.S. arm of the network of grabbing the cash off the prepaid cards and then laundering the money. It also accuses fast-talkers at the call centers of tricking victims into thinking they were talking to the IRS -- or authorities from the U.S. Citizenship and Immigration Services.
    The case involves more than 15,000 victims and more than $300 million in stolen money. And the investigation touched upon every part of the United States, according to authorities. Authorities said Thursday's bust amounted to the largest single domestic law enforcement action yet in this scam.
    I first started reporting on the fake IRS calls in late October 2013. We initially warned people that the so-called Grandma scam was morphing into a new IRS scam.
    The Grandma scam, as many consumers know, involves someone phoning or emailing a senior and pretending to be a grandchild. The fake grandchild claims that he or she needs money to get out of jail.
    The IRS scam involved realistic-sounding phone calls demanding money for taxes. Sometimes, the targets were recent immigrants, sometimes the elderly, sometimes students.
    Over three years, It seemed like I was always writing about some new version of the scams. In September, I wrote about a college student who was somehow conned into putting $1,762 on an iTunes cards to 'pay' the IRS for back taxes and taxes owed for school. All a fraud.
    While we're making progress with this major crackdown, the victims aren't likely to see any money now or in the future. Such is the case with many of these scams involving wiring money or putting cash on prepaid cards.
    In connection with the scheme, 20 individuals were arrested Thursday in the United States. Another 32 individuals in India were charged for their alleged involvement, according to the Department of Justice.
    The defendants were indicted by a grand jury in the U.S. District Court for the Southern District of Texas.
    The charges involved conspiracy to commit identity theft, impersonation of an officer of the United States, wire fraud and money laundering.  One of the defendants is separately charged with passport fraud.
    As silly as the whole thing sounds -- and admit it, you thought some of the victims must have been a little confused to fall for it -- it worked, and really well.
    The threats were convincing enough for many people. If the victim refused, the scammers threatened the person with arrest, deportation or suspension of a driver’s license or a business license. Some students were told they wouldn't be able to attend classes at college.
    One reason the fraudsters could sound convincing is they picked up information about their marks early in the game — including obtaining information from data brokers and other sources. Sometimes, they'd pick up data off social media.
    The scammer demands to be paid promptly. In some cases, scammers used fake but legitimate sounding names and IRS badge numbers. Scammers, in some cases, could even recite the last four digits of your Social Security Number.
    The scared-out-of-their-mind consumer heads frantically to the store to load cash onto a pre-paid debit card or runs to the bank in order to later wire the cash.
    Once the victim coughed up cash via a wire transfer or a prepaid card, a network of U.S.-based co-conspirators would liquidate and launder the extorted funds as quickly as possible in a sophisticated scheme using fake names and fraudulent IDs.
    In one case, authorities said, a victim in Hayward, Calif., lost $136,000.
    The victim was called multiple times over 20 days and directed to purchase 276 stored value cards which the defendants then transferred to reloadable debit cards.
    The Department of Justice said some of the victim’s money ended up later on cards which were later activated using stolen personal identifying information from U.S. victims.
    Department of Justice website provides details about the crackdown. If you believe you've been a victim of fraud, you may contact the Federal Trade Commission via this website.
    You can report the IRS impostor scam to the Treasury Inspector General for Tax Administration. See www.treasury.gov/tigta. Or you can call TIGTA at 800-366-4484.
    J. Russell George, Inspector General for the Treasury Inspector General for Tax Administration, said consumers still must keep up their guard.
    Arresting a group charged with participating in one major ring doesn't mean that the fraudsters will stop.
    "Do not, Americans, let your guard down. These people are persistent," George said. "My advice to you is to just hang up."
    Or, I'd suggest, if you feel up to it, you might craft another response when the con artists say someone is coming to arrest you right now, if you don't pay up.
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