Cyber-financial fraud investigation nets numerous arrests in South Africa, Canada, US

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Editor's note: visit ICE's DVIDS page for b-roll video of the operation.

PRETORIA, South Africa – Twenty individuals, including 11 in South Africa, were arrested Tuesday on charges stemming from cyber, mass-marketing fraud schemes. The arrests were made during a joint operation between U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), South African Police Service’s Directorate for Priority Crime Investigation (the Hawks), South Africa’s Crime Intelligence, Interpol, the South Africa Tactical Response Team and the South Africa Department of Home Affairs – Immigration.  

“This is the ramification of the collaboration between South African Police Service and U.S. Homeland Security Investigations,” said the National Head of the Hawks, Lieutenant General Anwa Dramat. “If criminals are able to interact with their fellows across the borders, we can do it better.”

“At HSI, we believe that by working with the South African government to dismantle these transnational mass marketing criminal organizations, we will collectively bring the perpetrators to justice and wherever possible, recoup the victims’ losses,” said HSI Pretoria Attaché Abraham Lugo. “Our collaboration with the South African Police Service, Interpol and other government agencies, will also increase public awareness of these crimes and hopefully will prevent people from falling victim to these schemes in the future.” 

The operation comes after HSI special agents followed a financial fraud scam to Pretoria, mainly Sunnyside.

The U.S. federal charges allege that a West African transnational organized crime enterprise was involved in numerous complex financial fraud schemes over the Internet. The mass marketing fraud includes romance scams, reshipping scams, fraudulent check scams, work-at-home scams, along with bank, financial and credit card account takeovers.

The investigation was initiated by HSI special agents in October 2011, after U.S. law enforcement was contacted by a female victim in Mississippi, who was victimised in a sweetheart scam. The victim received a suspicious package in the mail requesting her to reship the merchandise to an address in Pretoria, South Africa.  The investigation later revealed that the merchandise was purchased using stolen personal identity information and fraudulent credit card information of persons in the United States.  Investigators have so far identified hundreds of victims to this scam in the United States. This has resulted in the loss of millions of U.S. dollars. 

“Financial crimes that threaten the health of our national economy and criminals who attempt to cheat law-abiding citizens out of their hard-earned money will continue to be a major investigative priority for HSI,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “This case illustrates HSI's practice of leveraging to the fullest extent possible domestic and international law enforcement partnerships in pursuit of justice.”

Parmer oversees a five-state area of operations to include Mississippi, Alabama, Arkansas, Louisiana and Tennessee. 

This syndicate allegedly went for some years purchasing shipping labels from the U.S. Postal Service (USPS), Federal Express, United Parcel Service and DHL with fraudulent credit card information or stolen identities. Once the merchandise reached South Africa, the suspects advertised it for sale on the Internet.    

The operation came after an eight-count federal indictment was filed in the United States charging 18 individuals with wire fraud, bank fraud, access device fraud, mail fraud, aggravated identity theft, theft of government funds and money laundering. The U.S. District Court for the Southern District of Mississippi was granted arrest warrants for 12 individuals residing in South Africa and search warrants for associated properties in Pretoria.    

The suspects, 11 Nigerians and one South African woman, are linked to this global scam. The suspects allegedly enriched themselves with illegally obtained funds.

“Financial fraud is a danger to all Americans and a threat to everyone,” said Southern District of Mississippi U.S. Attorney Gregory K. Davis. “This round-up is continuing and powerful evidence of our commitment in federal law enforcement to aggressively identify, investigate and prosecute those who, through violation of federal criminal laws, pose a threat to the financial security of our citizens, communities and financial institutions. It is also evidence of the cooperation and partnership that exists between federal law enforcement and their international partners. Our special thanks go out to the various federal and international officers who not only assisted in the arrests of these individuals, but contributed significantly to the investigation that led us to this prosecution.”

During the operation, investigators seized computers, laptops, cell phones, notebooks and documents. The items will be surrendered to HSI for further investigation.

The suspects will appear in the Pretoria Magistrates’ Court Wednesday on charges of fraud and theft, before they will be extradited to the United States to face prosecution in the Southern District of Mississippi. Other members of this transnational criminal enterprise were arrested in Canada, California, Georgia, Indiana, New York, South Carolina and Wisconsin.

The HSI investigation continues.

The arrests were the result of an investigation led by HSI Gulfport and HSI Pretoria offices in partnership with the U.S. Postal Inspection Service, South African Police Service, Toronto Police, HSI Cyber Crimes Center, U.S. Treasury Executive Office of Asset Forfeiture, HSI Ontario, HSI Charleston and HSI Atlanta. The U.S. Department of Justice’s Organized Crime Gang Section and the U.S. Attorney’s Office for the Northern District of Georgia have filed related indictments in Charleston and Atlanta against five additional defendants.

The U.S. Department of Justice’s Office of International Affairs assisted in the provisional arrest warrants for the 11 Nigerian citizens and one South African in Pretoria and one Nigerian citizen in Toronto, Canada. A Nigerian citizen was arrested in Indianapolis, and three Nigerians were arrested in Atlanta. The remaining seven are U.S. citizens.