Today, an indictment was unsealed charging a total of 61
individuals and entities for their alleged involvement in a transnational
criminal organization that has victimized tens of thousands of persons in the
United States through fraudulent schemes that have resulted in hundreds of
millions of dollars in losses. In
connection with the scheme, 20 individuals were arrested today in the United
States and 32 individuals and five call centers in India were charged for their
alleged involvement. An additional
U.S.-based defendant is currently in the custody of immigration
authorities.
Assistant Attorney General Leslie R. Caldwell of the Justice
Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern
District of Texas, Executive Associate Director Peter T. Edge of U.S.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI),
Inspector General J. Russell George of the U.S. Treasury Inspector General for
Tax Administration (TIGTA) and Inspector General John Roth of the U.S.
Department of Homeland Security Office of Inspector General (DHS OIG) made the
announcement today.
“The indictment we unsealed and the arrests we made today
demonstrate the Justice Department’s commitment to identifying and prosecuting
the individuals behind these impersonation and telefraud schemes, who seek to
profit by exploiting some of the most vulnerable members of our
communities,”said Assistant Attorney General Caldwell. “This is a transnational problem, and
demonstrates that modern criminals target Americans both from inside our
borders and from abroad. Only by working
tirelessly to gather evidence, build cases and working closely with foreign law
enforcement partners to ensure there are no safe havens can we effectively
address these threats.”
“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 U.S. Attorney Magidson.
“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.”
“Today’s actions will not only bring a sense of justice to
the victims in this case, but this significant investigation will also help
increase awareness of this type of fraud,” said Executive Associate Director
Edge. “To potential victims, our message
today is simple: U.S. government agencies do not make these types of calls, and
if you receive one, contact law enforcement to report the suspected scam before
you make a payment.”
“All agencies involved in today’s announcement are to be
congratulated and commended on their outstanding efforts,” said Inspector
General George. “This indictment is the
result of countless hours of solid investigative work and excellent
cross-governmental collaboration concerning massive amounts of fraud that
individuals have allegedly perpetrated on the American people.”
“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 Roth. “We commend the victims
for overcoming any possible embarrassment or fear and coming forward and report
this to the authorities.”
The indictment was returned by a grand jury in the U.S.
District Court for the Southern District of Texas on Oct. 19, 2016, and charges
the defendants with conspiracy to commit identity theft, false personation of
an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged
with passport fraud.
The indictment alleges that the defendants were involved in
a sophisticated fraudulent scheme organized by conspirators in India, including
a network of call centers in Ahmedabad, India.
Using information obtained from data brokers and other sources, call
center operators allegedly called potential victims while impersonating
officials from the Internal Revenue Service (IRS) or U.S. Citizenship and
Immigration Services. According to the
indictment, the call center operators then threatened potential victims with
arrest, imprisonment, fines or deportation if they did not pay taxes or
penalties to the government. If the
victims agreed to pay, the call centers would then immediately turn to a
network of U.S.-based co-conspirators to liquidate and launder the extorted
funds as quickly as possible by purchasing prepaid debit cards or through wire
transfers. The prepaid debit cards were
often registered using misappropriated personal identifying information of
thousands of identity theft victims, and the wire transfers were directed by
the criminal associates using fake names and fraudulent identifications.
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.
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 indictment also alleges that the defendants extorted
$136,000 from a victim in Hayward, California, who they called multiple times
over a period of 20 days, fraudulently purporting to be IRS agents and
demanding payment for alleged tax violations.
The victim was then directed to purchase 276 stored value cards which
the defendants then transferred to reloadable debit cards. Some of the victim’s money ended up on cards
which were activated using stolen personal identifying information from U.S.-
based victims.
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.
An indictment is merely an allegation and the defendants are
presumed innocent unless and until proven guilty beyond a reasonable doubt in a
court of law.
DHS OIG, HSI and TIGTA led the investigation. The Ft. Bend, Texas, County Sheriff’s
Department; the Hoffman Estates, Illinois, Police Department; the Leonia, New
Jersey, Police Department; the Naperville, Illinois, Police Department; the San
Diego County District Attorney’s Office Family Protection/Elder Abuse Unit; the
U.S. Secret Service; U.S. Small Business Administration Office of Inspector
General; IOC-2; INTERPOL Washington; and the U.S. Attorney’s Offices of the
Northern District of Alabama, District of Arizona, Central District of
California, Northern District of California, District of Colorado, Northern
District of Florida, Middle District of Florida, Northern District of Illinois,
Northern District of Indiana, District of Nevada and District of New Jersey
provided significant support in this case.
The Federal Communications Commission’s Enforcement Bureau provided
assistance in TIGTA’s investigation.
Senior Trial Attorney Hope Olds and Trial Attorney Michael
Sheckels of the Criminal Division’s Human Rights and Special Prosecutions
Section, Trial Attorney Robert Stapleton of the Criminal Division’s Asset Forfeiture
and Money Laundering Section and Assistant U.S. Attorneys S. Mark McIntyre and
Craig Feazel of the Southern District of Texas are prosecuting the case.
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