Iowa Republican Rep. David Young and Arizona Democratic Rep. Kyrsten Sinema, respectively chair and co-chair of the Bipartisan Congressional Task Force to Combat Identity Theft and Fraud, released the following statements after news of the Justice Department’s (DOJ) arrest and indictment today of individuals involved in a sophisticated Internal Revenue Service (IRS) and Department of Homeland Security (DHS) US Citizenship and Immigration Services (USCIS) impersonation scam which has targeted American taxpayers since 2013.
Young and Sinema formally launched the Bipartisan Task Force to Combat Identity Theft and Fraud by introducing the Justice for Victims of IRS Scams and Identity Theft Act (HR 5345) in the House.
The Bipartisan Congressional Task Force to Combat Identity Theft and Fraud is a group of dedicated legislators working towards commonsense solutions to protect all Americans from hackers, scammers, thieves and fraudsters. There is no quick fix to protecting ourselves from scammers and identity theft. However, this bipartisan task force seeks to examine the scope of fraud and how best to address it with a thorough and thoughtful approach. We are committed to fighting these criminals with solutions to increase personal security for all Americans and increase the penalties and punishments for scammers and ruthless thieves. Through our bipartisan task force’s efforts we can fight for meaningful solutions.
This particular IRS impersonation scam involved five call centers in India targeting Americans with phony, threatening calls from IRS and USCIS; predominantly domestic money laundering through prepaid debit cards and wire transfers; and a network of conspirators in both the United States and India.
“This complex and large-scale IRS impersonation scam has victimized families across the country, and I appreciate the work of our federal investigators and law enforcement, as well as the coordination of the Indian government, to investigate this scheme,” Young said. “It is my hope the criminals charged face swift justice and are held accountable for these awful crimes. Today’s news is also an important reminder that identity theft and fraud are complex and ever evolving crimes which stand to target Americans from anywhere in the world. It is crucial folks take the time to remain informed and aware of existing threats and report instances of scams and fraud to federal officials or local law enforcement.”
“This is welcome news for the families in Arizona and across the country victimized by this damaging IRS impersonation scam," Sinema said. “Identity theft and financial fraud are complex and constantly-evolving crimes that devastate Arizona and American families. We will continue working across the aisle to shed light on the existing threats and find solutions to protect Americans’ financial security.”
The DOJ’s indictment was unsealed today charging 61 individuals and entities for their alleged involvement in a transnational criminal organization that has victimized tens of thousands of persons in the United States through fraudulent schemes that have resulted in hundreds of millions of dollars in losses.
"This scheme involved a network of call centers based in India where associates of the ring would call victims in the United States impersonating DHS, IRS or other government officials, demanding payment in order to clear fictitious arrest warrants, orders of deportation, or unpaid income tax," said DHS Secretary Jeh Johnson this evening.
Johnson said, "I commend the special agents from ICE Homeland Security Investigations for their tremendous work on this case over the past three years. This investigation was initiated by the HSI San Francisco and Sacramento’s Document and Benefit Fraud Task Forces, with assistance from HSI offices across the country including Houston, Dallas and Chicago."
"Today’s actions will not only bring justice to the perpetrators in this case, but also help raise awareness about the dangers of telemarketing fraud," Johnson stressed. "If you or a loved one receive a suspicious phone call soliciting money in exchange for government services or benefits, please call law enforcement to report a suspected scam beforemaking any kind of payments."
Assistant Attorney General Leslie R. Caldwell of DOJ’s Criminal Division, US Attorney Kenneth Magidson of the Southern District of Texas, Executive Associate Director Peter T. Edge of USCIS’s Homeland Security Investigations, Inspector General J. Russell George of the Treasury Inspector General for Tax Administration and Department of Homeland Security Inspector General John Roth made the announcement.
DOJ said, “In connection with the scheme, 20 individuals were arrested today in the United States and 32 individuals and five call centers in India were charged for their alleged involvement. An additional US-based defendant is currently in the custody of immigration authorities."
“The indictment we unsealed and the arrests we made today demonstrate the Justice Department’s commitment to identifying and prosecuting the individuals behind these impersonation and telefraud schemes, who seek to profit by exploiting some of the most vulnerable members of our communities,” Caldwell said. “This is a transnational problem, and demonstrates that modern criminals target Americans both from inside our borders and from abroad. Only by working tirelessly to gather evidence, build cases and working closely with foreign law enforcement partners to ensure there are no safe havens can we effectively address these threats.”
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” Magidson said, noting, “We are extremely vigilant when the names of US government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” Edge said. “To potential victims, our message today is simple: US government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment.”
“All agencies involved in today’s announcement are to be congratulated and commended on their outstanding efforts,” said Inspector General George. “This indictment is the result of countless hours of solid investigative work andexcellent cross-governmental collaboration concerning massive amounts of fraud that individuals have allegedly perpetrated on the American people.”
Roth said, “This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice. We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”
The indictment was returned by a grand jury in the US District Court for the Southern District of Texas on Oct. 19, 2016, and charged the defendants with conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged with passport fraud.
DOJ said, “The indictment alleges the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the IRS or USCIS. According to the indictment, the call center 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 centers 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 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. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.
According to the indictment, one of the call centers 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 the defendants extorted $136,000 from a victim in Hayward, California, who they called multiple times over a period of 20 days, fraudulently purporting 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.
DOJ said, “The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that 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.”
A DOJ 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 telefraud scam phone calls may contact federal authorities via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
DOJ has also encouraged any individual who suspects they are a victim of an IRS impersonation scam to report the incident to the Treasury Inspector General for Tax Administration here.