Five companies charged in telephone scam that targeted Canadians, Americans

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They bought Internet phone devices in bulk, used thousands of prepaid debit cards to launder money from North America to India and left behind elderly victims who were bullied into forking over thousands of dollars.

U.S. authorities announced on Thursday that they had charged 56 people and five companies operating call centres in India in a case that offers a peek into a widespread telephone scam that has swindled millions of dollars from people in Canada and the United States.

While the allegations unveiled on Thursday do not mention Canada, the indictment says the victims were "in the U.S. and elsewhere."

An RCMP spokeswoman said the force believes there might be a Canadian connection.

"Victims have reported that at times a caller would identify themselves as [an Internal Revenue Service] agent to the victim, and then change tactics when he/she realized that in Canada there is no IRS," Sergeant Penny Hermann told The Globe and Mail on Thursday in response to a question.

Read more: Indian police sting breaks up fraud ring that targeted Canadians through CRA scam

She added that the number of complaints to the Canadian Anti-Fraud Centre had dropped significantly following recent crackdowns against Indian call centres.

Earlier this month, after 70 suspects were arrested in Thane, near Mumbai, the RCMP said scammers who impersonated IRS officers were running identical schemes in which they claimed to be from the Canada Revenue Agency.

"The difference is that the pitches are tailored to the specific country," the RCMP said in a communiqué last week.

According to U.S. officials, the fraudsters charged on Thursday worked in a cluster of five call centres in Ahmedabad, in the western Indian state of Gujarat. People contacted the victims pretending to be, for example, from the revenue agency calling about taxes owed or from the immigration department. The victims were asked for money to fix whatever the problems were.

"This criminal network used a variety of schemes to trick frightened individuals over the telephone by tapping into their worst fears – arrest, deportation and other problems with U.S. government authorities," U.S. assistant attorney-general Leslie Caldwell told reporters.

"Once a victim was hooked, the call centres relied on a network of U.S.-based associates to cash out and launder the extorted funds as quickly as possible."

An indictment unsealed on Thursday alleges the suspects scammed more than 15,000 people, and stole the personal identification information of 50,000 people.

"The defendants have perpetrated an enormous and complex fraud scheme that has resulted in hundreds of millions of dollars of victim losses," the court document said.

According to the indictment, the call-centre operators bulk-bought about 100 magicJack devices that allow people to make unlimited Internet-based telephone calls.

About 1,500 magicJack phone numbers were used to make their fraudulent calls, the indictment said.

It alleged the accused had spoofing software that made ID displays on victims' phones show the words "U.S. Government" and the Washington area code, 202.

The indictment said a victim in California paid $136,000 over a three-week period and an 85-year-old woman in San Diego paid $12,300 after being threatened with arrest for tax violations.

The victims were instructed to buy prepaid value cards at retail stores and provide the identification numbers to the scammers.

Using those PINs, the conspirators transferred the sums to a second set of prepaid cards, which they had previously registered using stolen identities.

(In one instance, the personal information used to register the cards came from one of the defendants, who stole them from a New York State company for which he was an IT contractor.)

That second batch of prepaid cards was used to buy money orders that were deposited in bank accounts in the United States. Later, the money was wired to a company in Ahmedabad.