By Ed Diokno
Views from the Edge
An Asian American woman from San Jose, Calif. was bilked of thousands of dollars because of one scary phone call.
The caller said he was from the IRS and that she owed them money, she told KTVU-TV in hopes her experience could forewarn other potential victims. “It sounds very serious, very important,” said Kimsea Sim. “It was scary.”
Kim, a caretaker for her mother, is not a rich woman. Following the instructions from the caller, she borrowed $6,500 from friends and put the money in gift cards that you can buy in convenience stories. As instructed, she gave the caller the cards redemption codes and from there, an international criminal network laundered the money.
She joined at least 15,000 people the U.S. Justice Department says lost more than $300 million in an “enormous and complex fraud” running since 2013. Among the victims: an elderly San Diego woman who forked over more than $12,300 after she was threatened with arrest if she didn’t pay a penalty for fictitious tax violations. The worst case involved a California man who paid $136,000 to resolve alleged tax violations after being harassed repeatedly over a 20 day period.
Last week, justice was served. Two dozen members of the massive India-based fraud and money laundering conspiracy that targeted immigrants and defrauded thousands of the U.S. residents of hundreds of millions of dollars were sentenced in Houston this week to prison terms of up to 20 years.
Three of the U.S. ringleaders were sentenced earlier this year for laundering proceeds for the conspiracy, which was operated out of India-based call centers that targeted U.S. immigrants in various telephone fraud schemes.
“This case represents one of the most significant victories to date in our continuing efforts to combat elder fraud and the victimization of the most vulnerable members of the U.S. public,” said Attorney General Jeff Sessions. “The transnational criminal ring of fraudsters and money launderers who conspired to bilk older Americans, legal immigrants and many others out of their life savings through their lies, threats and financial schemes must recognize that all resources at the Department’s disposal will be deployed to shut down these tele-fraud schemes, put those responsible in jail, and bring a measure of justice to the victims.”
As U.S. authorities zeroed in the members of the scheme, Indian agencies went on their own dig, led by Inspector Madan Ballal of the Mumbai police department. Indian authorities worked on their end of the years-long investigation to close down the fraudulent call centers. As U.S. authorities were arresting the scam members in the U.S. in October of 2016, almost simultaneously, Indian authorities made scores of arrests following raids on call centers in the Thane suburb of Mumbai.
“The kind of people who worked there were tenth fail and twelfth fail,” meaning high school dropouts, explained Ballal to narrative.ly. “If these losers can cheat qualified Americans, we are also smart enough to catch them.”
THE SCAM
According to various admissions made in connection with the defendants’ guilty pleas, between 2012 and 2016, the defendants and their conspirators perpetrated a complex fraud and money laundering scheme in which individuals from call centers located in Ahmedabad, India, frequently impersonated tax or immigration officials in a ruse to defraud victims across the United States.
Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing stored value cards or wiring money.
Once a victim provided payment, the call centers turned to a network of runners based in the United States to liquidate and launder the extorted funds as quickly as possible by purchasing gift cards or retrieving wire transfers.
In a typical scenario, call centers directed runners to purchase these stored value reloadable cards and transmit the unique card number to India-based co-conspirators who registered the cards using the misappropriated personal information of U.S. citizens. The India-based co-conspirators then loaded these cards with scam funds obtained from victims. The runners used the stored value cards to purchase money orders that they deposited into the bank account of another person.
Runners also received victims’ funds via wire transfers, which were retrieved under fake names and through the use of using false identification documents, direct bank deposits by victims, and Apple iTunes or other gift cards that victims purchased.
The indictment in this case also charged 32 India-based conspirators and five India-based call centers with general conspiracy, wire fraud conspiracy, and money laundering conspiracy. These defendants have yet to be arraigned in this case.
THE SCAMMERS
Miteshkumar Patel, 42, of Illinois, received the harshest sentence from Federal Judge David Hittner of the Southern District of Texas. Patel received 20 years in prison followed by three years of supervised release on the charge of money laundering conspiracy.
According to court documents, Patel served as the manager of a Chicago-based crew of “runners” that liquidated and laundered fraud proceeds generated by callers at India-based call centers. Those callers used call scripts and lead lists to target victims throughout the United States with telefraud schemes in which the callers impersonated U.S. government employees from the IRS and U.S. Citizenship and Immigration Services (USCIS). The callers duped victims into believing that they owed money to the U.S. government and would be arrested or deported if they did not pay immediately.
In addition to recruiting, training, and tasking runners in his crew, Patel also coordinated directly with the Indian side of the conspiracy about the operation of the scheme. Patel was held accountable for laundering between $9.5 and $25 million for the scheme. Hardik Patel, 31, of Illinois, was sentenced to serve 188 months in prison followed by three years of supervised release on the charge of wire fraud conspiracy. Hardik consented to removal to India upon completion of his prison term. According to the factual basis of his plea agreement, Patel was a co-owner and manager of an India-based call center involved in the conspiracy. In addition to managing the day-to-day operations of a call center, Patel also processed payments and did bookkeeping for the various call centers involved in the fraud scheme.
Sunny Joshi, aka Sharad Ishwarlal Joshi and Sunny Mahashanker Joshi, 47, of Texas, was sentenced to serve over 12 years in prison on the charge of money laundering conspiracy, and 120 months in prison on the charge of naturalization fraud to run concurrent followed by three years of supervised release. Additionally, in connection with his sentence on the immigration charge, Judge Hittner entered an order revoking Joshi’s U.S. citizenship and requiring him to surrender his certificate of naturalization.
Twenty-two of the defendants sentenced before Judge Hittner were held jointly and severally liable for restitution of $8,970,396 payable to identified victims of their crimes. Additionally, the court entered individual preliminary orders of forfeiture against 21 defendants for assets that were seized in the case, and money judgments totaling over $72,942,300.
Eighteen other defendants from Indiana, Illinois, Texas, Alabama, Florida, New Jersey and California were also sentenced in Houston before Judge Hittner this week. Hittner recommended deportation for three of the defendants after their prison sentence, and entered at least five judicial orders mandating their removal from the U.S.
Upon learning about their sentencing, Kimsea Sim said she still owes money for the money she borrowed. She told KTVU-TV, “I don’t know if I get any money back … but, at least I know the person who did this bad thing, they get caught and they pay for their crimes.”
A Department of Justice website has been established to provide information about the case to already identified and potential victims, and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other tele fraud scam phone calls may contact the FTC via this website.
Taxpayers must remain wary of unsolicited telephone calls from individuals claiming to be IRS employees. If any taxpayer believes they or someone they know is a victim of an IRS impersonation scam, they should report it to TIGTA at www.tigta.gov or by calling 1-800-366-4484.
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