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The first CRA scam-related arrest in a decade motivates GRC’s investigations.

28 novembre 2018

CRA scam has been ongoing for several years, however one breakthrough in the investigation brings this scam back on our news network. On October, 30th2018, the first CRA scam related arrest in a decade comes to remind Canadians how private information is easily accessible and used. While the October 30th operation marks the first significant advancement in the fight against the CRA scam, it has resulted in several additional raids and arrests. The latest arrests have occurred this last November 7thand resulted in the arrest of 12 to 15 more alleged scammers.

In the past decade or so, thousands of Canadian citizens received what appeared to be an important call from the Canadian Revenue Agency (ARC), informing them of personal outstanding tax debt. However, little did they know, the agent they believed to be a Canadian Revenue Agency (CRA) official, was not who they claimed to be. Scammers use sophisticated technologies such as Caller ID spoofing software as to portray Canadian authorities credentials.  Following several years of complaints and lack of information, authorities face a breakthrough when a CBC investigative Market Place episode brings the light on Indian Clandestine call centers providing the  Gendarmerie Royale Canadienne (GRC) with a lead on the ongoing fraudulent CRA portrayal.  On October 31stof this year, Indian authorities have been able to dismantle multiple Clandestine call centers from which the stratagem was generated leading to the arrest of 28 suspects  . It is believed that this ongoing scam has facilitated the theft of over $10 millions from Canadian tax payers. Per the Indian police, all 28 individuals were arrested as a result of one single police operation.

The Scam in Canada:

The scammers used automated voice calls to inform Canadian citizens to contact a given phone number as per warning them that they owe money to the CRA. They make use of scare tactics such as threats of arrests and imprisonment in order to motivate victims to believe in the legitimacy of the calls. Large amount of Canadian, approaching 60 000, have been contacted for now several years. Although the process in tracking the clandestine call centers has been slow growing over the past few  years, the October 30tharrests has been the first one in the last decade. This one operation was only of many. Indeed, RCMP confirms that on October 21st, 2016, a previous operation resulted in the arrest of 70 Indian citizens involved in the clandestine call centers. The 2016 operation targeted a call centers employing 700 individuals first believed to be involved in a IRS version of the scam, but Canadian authorities found that after the arrest calls to Canadian citizens have dropped. The scammers often claim amounts between 700$ to 100 000$ and although some Canadian have been on alert, others have fallen for the well thought fear tactics. Indeed, one example of many is  Gehangir Rashidi who lost $100 000 to scammers. Victims like Rashidi are asked to transfer the money through a variety of illegitimate fashion such as gift cards, Bitcoins ATM. The CRA and other website such as the British Colombia Consumer Protection Website have put warnings in order to educate Canadians to avoid giving in the threats. Indeed, the BC Consumer Protection website provides information regarding the CRA’s official procedures such as communication and payment procedures. CRA relieves itself from any responsibilities regarding the divulging of confidential information as it has not been hacked or experienced any breech in its security. In 2017, CBC has interviewed yet another victim of the scam who has been contacted regarding her ongoing maternal leave. Victim Cicino believed the calls to be legitimate as the scammers seemed to be familiar with her current financial situations. However, scammers used the victim’s social media in order to gather information as she had previously postedregarding her recent delivery. While persecution and « RCMP limited success »in recent raids, Canada’s federal forces focus on prevention as to limit the number of Canadian victimization.  Other examples of victimization from across the country demonstrates that most often than not, the scammers pray on the lack of knowledge Canadian citizens have of government procedures and accessibility of personal information. For instance, in July, a Vancouver victim confides in Vancouver Sun reporter that the pretend CRA agent possessed information such as the victim’s CRA badge number.

The scam in the US.

A version of the CRA scam has been ongoing in the United States as well. It is found that the clandestine call centers which contacted Canadians under the pretense of being CRA officials, have also been contacting American citizens identifying themselves as IRS officials. In July of this year, the United States have sentenced 21 conspirators and the US Justice Department officially claimed that it had

“broken up what appeared to be nation’s first-scale, multinational telephone fraud operation”. 

According to the New-York Times, over the past 4 years, over 15 thousand American victims lost several hundreds of millions of dollars.  Similarly to Canada, the United-States have an ongoing issue with handling and investigating Indian-based scams. As recently as this last July, American Authorities have sentenced United-Stated residentsfor their roles in the oversees clandestine call centers.

The use of Bitcoins:

CRA Fraudsters request of their victims to provide payments in bitcoins as to limit the risk of arrests. Indeed, there is no global agreement or regulator on exchanges of cryptocurrency at the moment which may results in the facilitation of criminal use. Christine Lagarde, Managing Director of the International Monetary Fund (IMF) identifies cryptocurrency as a « potential vehicle for money laundering”. The case of this CRA scam comes to be the perfect example of Lagarde statement. Indeed, Bitcoins are almost untraceable which allows for scammers to cash in illegitimate money exchanges without being caught. However, India, which is at the centre of several clandestine call centres targeting Canadian and American citizens, is slowly moving forward with the  criminalization of Bitcoin use and exchanges. Although it is not yet fully accomplished, the decision results from a surveydemonstrating that over $3.5 billion worth of transaction are from bitcoin exchanges. In the United States, Bitcoins have no « legal tender », and is found by “the Bureau of the Treasury Department to have no legal status in any jurisdiction”. However, the USA’s Internal Revenue Agency (IRS) does not accept cryptocurrency as currency regardless of the fact that U.S handles the “second largest volume of bitcoins” thus around 26%.  The CRA scam involved in both Canada and the United States work hand in hand with the use of cryptocurrency as it allows the scammers involved to not leave traces of their provenance. Indeed, as previously mentioned, CRA scammers require of victims to pay in different ways such as gift cards and bitcoins transfers. This way, it allows the victims to remain ignorant of the claimants’ identity and\or location as such currency can be cashed anywhere.

Canadian authorities along with the FBI and Indian police have engaged in a corporationin order to investigate the ongoing crimes and facilitate the arrests, raids and further criminal actions against the fraudsters. The latest arrests of this October and November have been at the centre of this investigations as it is the most significant advancement in a decade. Regardless of putting the GRC on a hopeful path, the recent events can serve as reminders to the sensitivity of privacy, education and unlawful procedures. Indeed, the Canadian government has intention to focus on the prevention in order to educate its citizens. Social media platforms may be used to provide fraudsters with sufficient knowledge of citizens that may strengthen their manipulation abilities. Finally, CRA fraudsters make use of different technological platform and sophisticated technologies to better their manipulation tactics. It is only hope that an educated and cautious world community can overcome fear.


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