WASHINGTON: Four suspects have pleaded guilty to fraudulently collecting hundreds of millions of dollars from tens of thousands people, says the US Justice Department.

The department has charged a total of 61 individuals and entities — all Indians — in one of the worst impersonation fraud in the US history. The gang particularly targeted the Pakistani-American community because of their vulnerability. The scam began in June 2013 and continued through December 2015. This was the period when the Pakistani community in the United States felt particularly vulnerable because of the rapidly deteriorating US-Pakistan relations and some of them were easily persuaded to believe that they need to pay the scammers to avoid arrest.

This correspondent was among those thousands of Pakistanis who received a call from the scammers and later visits to pay centres in Virginia showed that majority of victims at those centres were Pakistani citizens, particularly those living in the United States on visas.

The US Justice Department has also set up a website for victims, raising hopes that once the case is settled, they may be able retrieve the money they lost. On Friday, the department issued a statement saying that this multi-million-dollar telephone impersonation fraud and money laundering scheme was perpetrated by India-based call centres.

Gang of Indians fraudulently collected hundreds of millions particularly from Pakistani-Americans

On Friday, Nisarg Patel, 26, of New Jersey, Dilip Kumar Ramanlal Patel, 30, of Florida and Rajesh Kumar, 39, of Arizona pleaded guilty to one count of conspiracy to commit fraud and money laundering offences. The pleas were entered before US district judge David Hittner of the Southern District of Texas. All three have been in federal custody since they were arrested in October 2016. On October 27, 2016, the Justice Department charged a total of 61 individuals and entities for their alleged involvement in a transnational criminal organisation that victimised tens of thousands of persons in the United States through fraudulent schemes and resulted in hundreds of millions of dollars in losses.

Law-enforcement officials arrested 20 individuals in the United States and 32 individuals in India in October 2016 and charged them with the fraud. Five call centres in Ahmedabad, India, were also charged. More arrests were made later.

The indictment, unsealed in a court in Texas, alleges that the defendants were involved in a sophisticated fraudulent scheme organised by conspirators in India, including a network of call centres in Ahmedabad. Using information obtained from data brokers and other sources, call centre operators allegedly called potential victims while impersonating officials from the Internal Revenue Service (IRS) or US Citizenship and Immigration Services.

The call centre 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 centres would then immediately turn to a network of US-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 Justice Department said 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 US-based individuals.

One of the call centres 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 US-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, claiming 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 US-based victims.

The conspirators would at times allegedly use alternative fraudulent schemes in which the call centre operators would offer the victims small short-term loans or advise them that they were eligible for grants. 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.

Published in Dawn, September 11th, 2017