The move was the first parallel action by the Indian and U.S. governments against elder fraud.
India, US Coordinate to Bust Call Center Scam That Targeted Elderly
In a first, India’s Central Bureau of Investigation and the U.S. Department of Justice have cracked down on an online scheme that allegedly used call centers in India to target hundreds of elderly American citizens since 2011.
“In an unprecedented collaborative effort, the Central Bureau of Investigation (CBI) in India took actions in parallel with today’s filing against corporate and individual participants in the scheme located in Delhi, Noida, Gurgaon, and Jaipur,” the DoJ said in a press release on Oct. 15.
A U.S. federal court has issued a temporary restraining order against Michael Brian Cotter, 59, and five companies that he is associated with in a scheme that allegedly “contacted U.S. consumers via internet pop-up messages that falsely appeared to be security alerts from Microsoft or another well-known company. The pop-up messages fraudulently claimed that the consumer’s computer was infected by a virus, purported to run a scan of the consumer’s computer, falsely confirmed the presence of a virus and malware, and then provided a toll-free number to call for assistance. When victims called the toll-free number, they were connected to India-based call centers participating in the fraud scheme,” the DoJ said.
The CBI raided various locations in the National Capital Region of India, including those in Noida and Mainpuri in Uttar Pradesh, Gurgaon and Faridabad in Haryana, Jaipur in Rajasthan, and Delhi.
“The CBI has recovered digital evidence, incriminating documents and bank accounts, fixed deposits etc., worth around INR 190 crore ($25.8 million), around INR 25 lakh ($34,040) in cash and gold valued at around INR 55 lakh ($74,888),” said R. K. Gaur, spokesperson for the CBI.
Cotter, a resident of Glendale, California, is alleged to have “knowingly provided support for the India-based accomplices.”
The DoJ complaint names five companies where Cotter was an officer, director or managing member, and alleges that bank accounts and relationships with payment processors were established in the names of those entities. It alleges that Cotter and co-conspirators in India carried out the fraud through Indian call centers.
After a pop-up message that appeared to be from Microsoft or another reputable company claiming that the consumer’s computer was infected with a virus and at risk of irreversible damage, victims were led to scan the computer, which would fraudulently show multiple viruses and an offer to connect them to a toll-free number for help. The Indian representative on the call would acquire remote access of their computer and ask them to pay hundreds of dollars for solutions to problems that never existed, authorities said.
“To collect payments, the call center representative who is remotely connected to a consumer’s computer, directs the consumer to one of Defendants’ websites to make payments via credit card. Defendants and their co-conspirators have created and utilize multiple websites to facilitate the technical support fraud scheme … ,” according to the complaint filed by the DoJ seeking the restraining order.
The DoJ said individual victims have reported paying hundreds to thousands of dollars for unwanted and unnecessary technical support services. There were about 19 URLs under which the scheme worked.
Since 2011, consumers have filed over 500 complaints on a database maintained by the U.S. Federal Trade Commission.
“Today’s filing reflects the DoJ’s continuing commitment to using all tools available to protect seniors from fraud, especially schemes perpetrated by transnational criminal organizations,” said Jeffrey Bossert Clark, acting assistant attorney general of the DoJ’s Civil Division.
The CBI revealed on Sept. 17 that it had registered a case against six private companies and carried out searches at 10 locations.
The case listed unknown individuals and companies that included Softwill Infotech Private Ltd. and Saburi TLC Worldwide Service Private Ltd. in New Delhi, Saburi Global Services Private Ltd. in Gurugram, Benovellient Technologies Private Ltd. in Noida, and Systweak Software Private Ltd. and Innovana Thinklabs Ltd. in Jaipur.
This most recent case is not the first instance of Americans being defrauded by India-based call centers.
In January, the DoJ filed civil action cases against five companies and three individuals accused of carrying out hundreds of millions of fraudulent robocalls impersonating government investigators and bombarding Americans with alarming messages. The messages made false claims, such as their personal information had been compromised, or they faced imminent arrest or deportation. Most of these calls originated from India, authorities said.
Hitesh Madhubhai Patel, 43, an Indian citizen, pleaded guilty in January to conspiracy to commit wire fraud for operating and funding India-based call centers that defrauded thousands of victims of millions of dollars between 2013 and 2016.
In 2018, Miteshkumar Patel, the kingpin of the same scam targeting U.S. victims, was held accountable for laundering about $25 million. He was one of 24 defendants who received sentences of up to 20 years.
Quick money and easy access to technology help fuel such scams, especially in countries like India which has high rate of youth unemployment.
“India is emerging as a hotbed of such criminal activities because the youth see easy money,” said Vineet Kumar, founder and president of Cyber Peace Foundation, a cybersecurity civil society organization. “Their targets are mostly the elderly. Many of them are first-time users of technology. While they are learning it, nobody teaches them about safety and security.”
Kumar said the collaboration between the DoJ and the CBI is a welcome step.
“This is something missing in the past. I am sure there will be much more collaboration in the future,” he said.
The CBI is also collaborating with other foreign agencies to investigate similar cases.
“The CBI has been making concerted efforts to identify and rapidly dismantle any such network of transnational cyber frauds from India,” Gaur said.
(Edited by Uttaran Das Gupta and Judy Isacoff.)