US cracks down on massive global mail fraud

One suit names Singapore and Swiss-based outfits said to take in up to $82m annually

WASHINGTON • The US justice authorities have unveiled a major effort to dismantle global mass-mailing fraud operations that officials say cheat millions of people out of tens of millions of dollars annually.

A civil action names Singaporean and Swiss-based outfits that allegedly took in US$50 million to US$60 million (S$68 million to S$82 million) annually on the back of fraudulent claims, some of which purportedly came from world-famous psychics, according to the postalnews.com website.

Officials announced criminal charges, economic sanctions, asset seizures and other actions aimed at companies and individuals also based in countries including Canada, France, India, Turkey and the United States itself.

The scams followed a familiar pattern, according to the Justice Department, which said "direct mailers" sent phony letters, often to the elderly, claiming the recipients had won cash or prizes that could be collected for processing fees.

One civil suit brought to shut down entities and individuals engaged in such practices for more than a decade names BDK Mailing, Mailing Force and Only Three - referred to as BDK and said to be under common ownership, and based in Singapore and Switzerland, according to postalnews.com.

The website says BDK acts as a "direct mailer" that sends millions of multi-piece solicitations to potential victims in the US that profess to come from financial entities, scholars and world-renowned psychics, with contrived names like "Harrison Institute", "Dr Grant", "Finkelstein & Partner", and "Marie de Fortune", among others.

"The solicitations are written to give the impression they are personalised and inform recipients they will receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of US$50 to US$55," the website says. "In reality, the complaint alleges, the purported senders and the promised winnings are fictitious. Although victims send in the requested fees by cash, cheque or credit card, they receive nothing in return."

At a news conference, US Attorney-General Loretta Lynch cited the case of Ercan Barka, 34, of Turkey who was arrested this month in New York as he prepared to board a plane and was later charged with conspiracy to commit mail fraud. Prosecutors say Barca's mailing campaigns had taken US$29 million from US victims since 2012.

As part of the efforts, the Treasury Department said it had designated a Canadian payments processor, PacNet, which operates in Europe, Asia and Africa, as a transnational criminal organisation, effectively forcing it out of the US banking system and hampering its access to global financial networks.

The department also blacklisted 12 people and 24 entities across 18 countries suspected of being involved in or supporting PacNet's operations.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on September 24, 2016, with the headline 'US cracks down on massive global mail fraud'. Print Edition | Subscribe