With stiff sentences for 21 conspirators last week in the United States and a round of indictments in India, the Justice Department says it has broken up what appeared to be the nation’s first large-scale, multinational telephone fraud operation.
Over four years, more than 15,000 victims in the United States lost “hundreds of millions” of dollars to the sophisticated scam, and more than 50,000 individuals had their personal information misused, the department said Friday. The money was routed through call centers in India back to the ringleaders in eight states.
The fraudulent calls came suddenly and frequently while the scam was active from 2012 to 2016, according to court documents. A person posing as an Internal Revenue Service or immigration official was on the phone, threatening arrest, deportation or other penalties if the victims did not immediately pay their debts with prepaid cards or wire transfers.
The calls targeted the most vulnerable Americans, including immigrants and older people.
An 85-year old woman in San Diego paid $12,300 to people claiming to be I.R.S. employees who threatened her with arrest for tax violations.
A Chicago man paid $5,070 after being threatened with arrest and deportation by supposed state police and immigration authorities, the indictment said.
The words “U.S. Government” showed up as the caller I.D. on a number from which a New Hampshire woman was told to pay the I.R.S. $3,980 in payment cards, the court papers said.
In the announcement on Friday, the department said 21 people living in eight states — Illinois, Arizona, Florida, California, Alabama, Indiana, New Jersey and Texas — were sentenced last week in Houston to prison for up to 20 years for their role in the scheme.
Two other conspirators in Illinois were sentenced in February to between two years to just over four years for conspiracy, and a third person in Arizona was given probation in a plea agreement, it said.
In addition, 32 contractors in India involving five call centers in Ahmedabad, a city in western India, have been indicted on wire fraud, money laundering and other conspiracy charges as part of the operation, the department said.
They have yet to be arraigned, it said.
The sentences “represent the culmination of the first-ever large scale, multi-jurisdiction prosecution targeting the India call center scam industry,” Attorney General Jeff Sessions said in a statement.
The investigation took years of work by Justice Department, Department of Homeland Security, Immigration and Customs Enforcement, and Treasury Department officials, the statement said.
Some of the callers in the operation also pretended to be offering grants or payday loans linked to a borrower’s paycheck, prompting victims to pay a fee upfront before they could receive the fictitious loan, the 2016 indictment says. For example, a man in Houston was told he should pay a $195 fee to get a $1,000 loan, which he never did.
The Internal Revenue Service has repeatedly warned Americans, especially just before the April deadlines to file taxes, about scams like this one.
For example, in tips on how to avoid fraud, the I.R.S. says it does not demand immediate payment of debts using a specific method, such as a prepaid debit card, gift card or wire transfer.
Generally, the I.R.S. will first mail a bill to a taxpayer who owes money, allowing for questions or a formal appeal. It will not threaten to bring in the police, immigration officers or other law-enforcement authorities, or revoke licenses or immigration status, the I.R.S. says.
“Threats like these are common tactics scam artists use to trick victims into buying into their schemes,” the I.R.S. says.
The defendants were of Indian origin living in the United States and coordinating with the call centers in India, federal officials said, citing information obtained partly through their plea agreements.
Workers at the call centers impersonated officials from the I.R.S. or U.S. Citizenship and Immigration Services, threatening people in the United States with arrest, imprisonment, fines or deportation if they did not pay alleged debts to the government, the Justice Department said.
They chose their victims through information obtained from “data brokers” or from other sources, the department said.
The people who were duped were instructed to pay using prepaid cards or to wire money. The call centers then turned to a network of “runners” based in the United States, who typically used the cards to purchase money orders that were deposited into bank accounts.
Runners also redeemed funds from wire transfers with false names and identification documents, or exploited the funds through gift cards and Apple iTunes cards, it said. The runners would earn a fee or a percentage, it said.
“This type of fraud is sickening,” said Ryan Patrick, the United States attorney for the United States District Court for the Southern District of Texas in Houston, where last week’s sentences were imposed.
Twenty-two of the defendants sentenced last week were told to pay restitution of about $8.9 million to victims who could be identified, the department said. The sentences also included judgments of over $72.9 million.
The department named all 24 defendants, but it highlighted the role of the three men with the longest sentences.
Miteshkumar Patel, 42, of Illinois, was responsible for laundering between $9.5 million and $25 million in his role overseeing a Chicago-based network of runners, the department said. He was given a 20-year sentence.
Hardik Patel, 31, of Illinois, was given more than 15 years in prison for wire fraud conspiracy as a coordinator with call centers in India, laundering between $3.5 million and $9.5 million, it said.
In Texas, Sunny Joshi, 47, was sentenced to about 12 years in prison for money laundering of between $3.5 million and $9.5 million, the statement said.
By Christine Hauser, MSN News