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  • Friday, 28 October 2016
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Federal Agents Arrest 20 in International IRS Scam with Ties to India

Federal authorities have arrested nearly two dozen people across the United States -- and charged more overseas -- in connection with a far-reaching IRS scam that used fear and intimidation to deceive victims.

October 28, 2016

Published by ABC

Federal authorities have arrested nearly two dozen people across the United States -- and charged more overseas -- in connection with a far-reaching IRS scam that used fear and intimidation to deceive victims.

Homeland Security, Internal Revenue Service and Treasury Department agents took down a nationwide network of confederates who have allegedly been working with scammers to collect money from victims and send it overseas.

During the sweep agents today arrested 20 suspects in Illinois, California, New Jersey, Florida, Alabama and Texas.

In India, 32 people from five different call centers have been charged in the telephone fraud schemes.

The scammers are "menacing and ruthless," often targeting vulnerable immigrants and elderly citizens in the United States from phone banks in India, according to a top U.S. official. Those callers worked with so-called "runners" in the U.S. who would liquidate and transfer funds. 

"These folks are con men and con women," U.S. Immigration and Customs Enforcement Assistant Director Bruce Foucart said today at a press conference in Washington, D.C.

The scammers have "done their research" using publicly available information, including sites like Facebook, he said. They identify vulnerabilities to exploit.

Victims in the United States have been taken for losses in the hundreds of millions of dollars. Since 2013, more than two million people reported getting solicitations and about 10,000 of them ended up paying some amount of money to the scammers, according to J. Russell George, Treasury's Inspector General for Tax Administration.

It starts with a phone call.

It was Election Day, 2014 and Joseph, a retired federal service employee, who asked to be identified by only his first name, had just come home from voting.

His phone rang and the man on the other end of the line identified himself as an officer with the IRS. The caller gave a badge number and said that Joseph owed money to the IRS and that if he didn’t comply law enforcement would be at his home "within thirty minutes" to arrest him.

"At that point I was under the spell," Joseph said.

Joseph then went to the bank, withdrew funds and went to a number of supermarkets to purchase several different types of gift cards. He transferred the numbers on the cards to the person on the phone.

This went on for four days until he called his accountant, who said "this is not right, you need to stop," according to Joseph.

"As soon as she said that, I was snapped out of it," he said.

In the end, he lost $25,000.

Scammers use open-source research to find out information about their targets. They also look for people that have the funds to pay out, according to a source familiar with the investigation.

Christine, who also only wanted to be identified by her first name, had racked up a number of medical bills from her cancer treatment a couple of years ago. She had been audited by the IRS and had delayed providing the details of her medical expenses.

She is a mother, grandmother and a medical sales professional from Southern California.

One day she went to check her voicemail on her home phone. A woman identified herself as being from the IRS and said she needed to speak with Christine "immediately."

"I thought, 'Oh boy, I waited too long,'" she said about the voicemail.

Christine called back and was told that law enforcement would be dispatched to her place of work because she had failed to respond to multiple requests from the IRS.

After some back-and-forth, the scammers told her there was nothing they could do to stop it, except take a deposit on the money that was owed.

"The thing that had gotten me about the amount was that it was within $300 for the amount that I was being audited for," she said.

She was told that there was only "a particular type of card" that the IRS would accept, neither checks or a debit card would suffice.

By requesting to be paid with gift-type cards, the scammers are getting people to liquidate their funds, which makes it easier to transfer money and harder for law enforcement to trace, according to a source familiar with the investigation.

Three trips to the bank, two stops at the supermarket and four hours later, she had transferred $6,850. They stayed on the phone with her until all of the money was transferred.

Within minutes of hanging up with the scammers, she said she realized, "I’d been had."

Scammers try to push a sense of urgency on their victims, threatening to send law enforcement or impose instant penalties.

Officials say that that false sense of urgency is a huge red flag and does not occur in legitimate dealings, especially when someone is being notified for the first time.

Authorities say people should ask for valid credentials and always notify local law enforcement if something does not seem right.

Christine and Joseph said they were embarrassed, ashamed and shocked by the experience, but both hope that their trauma can help others who may fall prey to similar scams.

"We need to pay attention. It’s kind of a big bad world out there and we owe it to ourselves to embrace the good, but be aware of the bad," said Christine.

The head of the Justice Department's Criminal Division, Leslie Caldwell, has a message for Americans: "If you get one of these calls, it is not the U.S. government calling you."

"Even if your caller ID says -- as it did in many of these instances -- 'U.S. government,' 'IRS' or some other government agency, it is not the U.S. government. It is a scam," she said at today's press conference. "The U.S. government does not operate in this manner."

Caldwell said the U.S. government will be seeking extradition of the suspects still in India.

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