Extortion by telephone: US indicts dozens in Indian call centre fraud that bilked Americans out of $418 million

Policemen walk out a closed call centre in Mira-Bhayander, in the outskirts of Mumbai.
Policemen walk out a closed call centre in Mira-Bhayander, in the outskirts of Mumbai.PHOTO: REUTERS

WASHINGTON (NYTIMES) - Federal prosecutors have brought charges against dozens of people accused of taking part in a giant international crime ring that relied on Indian telephone call centres to bilk thousands of Americans out of more than US$300 million (S$418.47 million).

While service calls routed to phone banks in India have become a frequent annoyance for US consumers - as well as comic inspiration for late-night TV hosts - the Justice Department revealed a darker side to the operations in an 81-page indictment unsealed in federal court in Houston.

The operators of the scheme at five call centres in India would pose as tax collectors from the Internal Revenue Service, or as US customs agents, loan officers, police officers or other authority figures in calling "targets", officials said.

The victims then were threatened with arrest or deportation if bogus debts were not paid, according to the charges.

Nearly two dozen accomplices arrested inside the United States on Thursday (Oct 27) were accused of working as "runners", or managers to collect and then launder the money by using pre-paid debit cards, Western Union transfers and informal money exchanges to funnel money back to India.

In one case, an 85-year-old woman in San Diego turned over US$12,300 after she was threatened with arrest over a supposed unpaid tax bill, officials said, and in another case a California resident paid more than US$136,000 through pre-paid debit cards after a caller contacted him repeatedly over the course of three weeks about a tax bill.

Some 15,000 victims in all were bilked, the officials said; while many of the people targeted were immigrants from India or across South Asia, large numbers were not.

"This case is massive," said Mr John Roth, the inspector general of the Department of Homeland Security, and "the investigation touched every part of the United States".

Although most of the people charged on Thursday reside in India, Justice Department officials said they would seek to have the authorities there extradite defendants to the United States to stand trial on fraud, money laundering and other charges.

Earlier this month, Indian officials arrested 70 people there who were also accused of taking part in call-centre schemes to defraud Americans by posing as IRS agents.

But US officials said on Thursday that the investigation here was unconnected to the one in India, and involved a separate ring of call centres.

Taken together, the separate investigations 12,070km apart indicated the wide scope of the problem, and US authorities warned people to be on guard for scam callers.

"If you get one of these calls, it is not the US government calling you," Ms Leslie R. Caldwell, the head of the criminal division at the Justice Department, said in announcing the charges at a news conference in Washington.

"Even if your caller ID says, as it did in many of these instances, 'US government,' 'IRS' or some other government agency, it is not the US government; it is a scam," she said. "Don't pay any money, and instead report the call to law enforcement."

The callers used personal information about their targets culled from social media postings and other sources of data to make their demands seem genuine.

They were brazen, persistent and "ruthless" - and "willing to go to frightening lengths" to extort money, said Mr Bruce Foucart, an assistant director at the US Immigration and Customs Enforcement agency.

He cited a case this year in Colorado Springs, Colorado, in which a man faced repeated demands from callers to pay four years of supposed back taxes.

After the man refused, one of the suspects called 911 posing as the man to say he was armed and wanted to "kill cops", Mr Foucart said. More than a dozen police officers arrived at the home, where the man's daughter was home alone. "Fortunately, no one was hurt," he said.

Ms Caldwell said it might be very difficult for the victims to get back much, if any, of the money they lost in an international case like this one.

"The sad thing about these scams is, often, once the money's paid, it's gone," she said.