Dozens arrested in $300M India-based IRS fraud scheme

WASHINGTON, Oct. 27 (UPI) -- The Department of Justice on Thursday indicted 61 people and entities for alleged involvement in a $300 million fraud scheme in which India-based scammers impersonated Internal Revenue Service agents.

In the scam, people in a telephone call center network in India obtained personal information from data brokers to target at least 15,000 people with threats of fines, deportation or imprisonment if they did not pay fees while posing as IRS agents.

Thousands of people paid the fees and the money was laundered through "hawalas" -- a network system designed to be an alternative to Western banking practices originally developed in India.

Trust, family relationships and regional affiliations are used in the hawala underground banking system where hawaladars, or hawala dealers, transfer money between people without funds actually being moved -- making it difficult to trace.

"Today's actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud," U.S. Immigration and Customs Enforcement's Homeland Security Investigations Executive Associate Director Peter T. Edge said in a statement. "To potential victims, our message today is simple: U.S. government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment."

In one incident, one of the call centers extorted $136,000 from a victim in California by accusing the Hayward resident of tax violations.