 In early September, the U.S. Department of Justice indicted 15 people and five India-based businesses in a call center scam that defrauded over 2,000 U.S. citizens of over $5.5 million in losses. The Treasury Inspector General for Tax Administration conducted the investigation, using the Consumer Sentinel Network to identify victims and defendants.
In the scam, the call center operators used information obtained from data brokers and other sources, allegedly calling potential victims while impersonating officials from the Internal Revenue Service or individuals offering fictitious payday loans. The call center operators would threaten potential victims with arrest, imprisonment, or fines if they did not pay taxes or penalties to the government.
If the victims agreed to pay, the call centers allegedly would immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds by purchasing prepaid debit cards or through wire transfers, including through MoneyGram and Western Union, to the attention of fictitious names and U.S.-based defendants and their co-conspirators.
Also in early September, five people pleaded guilty to conspiracies to commit mail fraud and money laundering for their roles in a $3.5 million sweepstakes scam that targeted the elderly. Investigators at the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations used the Consumer Sentinel Network to identify victims.
The U.S. Department of Justice filed both cases in the Northern District of Georgia.
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The Federal Trade Commission hears from millions of consumers each year about fraud, identity theft, and other problems, allowing us to warn other consumers about scams they should watch out for, while also providing the agency with an important source of information to support our enforcement actions.
The FTC is making this information more accessible by releasing its aggregated consumer complaint data on a quarterly basis in a new interactive online format. Up until now, the FTC has released aggregated consumer complaint data collected through our Consumer Sentinel Network on an annual basis. Our new tool will provide more frequent updates of what consumers are reporting, while empowering users to explore the data by types of fraud, state, and a variety of other dimensions. You can try it out here.
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The Consumer Sentinel Network now includes more complaints from the South Carolina Department of Affairs. These complaints include various types of consumer fraud and will augment the current data feed.
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 In late September, the Federal Trade Commission, working jointly with the Department of Justice, mailed 1,179,803 refund checks totaling more than $505 million to people who were deceived by AMG Services, Inc. and Scott A. Tucker, who operated a massive payday lending scheme. Tucker's companies, including AMG Services, Inc., marketed online payday loans with false loan disclosures that did not accurately describe the true cost of the loans. Despite informing customers that they would charge them only a one-time finance fee, they proceeded to make multiple withdrawals from customers’ bank accounts, assessing a new finance fee each time. As a result, consumers paid far more for the loans than they had originally agreed to pay.
The FTC won a civil judgment against Tucker and related defendants in September 2016. In 2017, the United States Attorney’s Office for the Southern District of New York obtained a criminal conviction against Tucker and his attorney, Timothy Muir, and in 2018, obtained a sentence of 16 years in prison for Tucker, and a penalty of $528 million against U.S. Bancorp for violations of the Bank Secrecy Act, including failing to timely report suspicious banking activities of Tucker. The US Attorney’s Office also obtained additional settlements with three Native American tribes involved in the operation, resulting in over $50 million recovered.
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FTC attorney Karen Dodge and FTC Midwest Region team members Joannie Wei, Elizabeth Scott, and Doug McKenney, as well as DOJ attorney Margaret Moeser, were recently honored with Samuel J. Heyman Service to America Medals, also known as Sammies, for negotiating the historic $586 million settlement with Western Union. Thanks to the work of the team, other FTC colleagues, and the Department of Justice, hundreds of thousands of consumers who lost money through fraud-induced money transfers will be getting refunds.
The FTC alleged that Western Union facilitated consumer fraud through its global money transfer system. According to the complaint, the company ignored fraud and profited from the wrongdoing of scammers, including some of its own agents. In addition to negotiating $586 million in consumer refunds, the team reached a groundbreaking settlement that will change how Western Union does business.
The Service to America Medals were created in 2002 by the nonpartisan, nonprofit Partnership for Public Service. Among the highest honors a federal employee can receive, the Sammies acknowledge excellence in government. The FTC and DOJ team won in the Homeland Security and Law Enforcement category.
Available here.
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