SA, US agencies crack financial fraud scam

22 May 2014

South African and United States law enforcement agents arrested 11 people in Pretoria on Tuesday on charges related to an international financial fraud scam involving cyber crime and fraudulent mass marketing schemes.

The individuals were among 20 suspects who were arrested in South Africa, Canada, and the US states of California, Georgia, Indiana, New York, South Carolina and Wisconsin.

The Pretoria arrests involved a joint operation between the Homeland Security Investigations (HSI) division of US Immigration and Customs Enforcement, the South African Police Service (SAPS) Directorate for Priority Crime Investigation, South Africa’s Crime Intelligence, Interpol, the South Africa Tactical Response Team and the Department of Home Affairs.

HSI special agents had followed a financial fraud scam to Sunnyside in Pretoria, according to a joint statement issued on Wednesday by the SAPS and US Department of Homeland Security.

The individuals are allegedly linked to a West African transnational organised crime enterprise, involving numerous complex financial fraud schemes over the internet. The mass marketing fraud includes romance scams, reshipping scams, fraudulent cheque 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 US law enforcement was contacted by a Mississippi resident who fell prey to a sweatheart scam. The victim received a package in the mail asking her to reship it to an address in Pretoria.

The investigation revealed that the merchandise was purchased using stolen personal identity information and fraudulent credit card information of US citizens. The investigators have identified hundreds of victims of the scam in the US.

This syndicate purchased shipping labels from the US Postal Service, Federal Express, United Parcel Service and DHL using fraudulent credit card information and stolen identities over a number of years. Once the merchandise reached South Africa, it was advertised it for sale on the internet.

An eight-count federal indictment has been 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 US District Court for the Southern District of Mississippi was granted arrest warrants for 12 people linked to the global scam living in South Africa, along with search warrants for associated properties in Pretoria.

During the operation, investigators seized computers, laptops, mobile phones, notebooks and documents.

According to the SAPS, the suspects will appear in the Pretoria Magistrates Court on charges of fraud and theft before being extradited to the US to face prosecution in the Southern District of Mississippi.

Source: SAnews.gov.za