US Charges 19 in International Fraud, Money Laundering Scheme
U.S. authorities on Wednesday charged 19 people with taking part in a complex international fraud and money laundering ring that tricked companies and consumers out of millions of dollars.
The charges were part of an international sweep Wednesday, in which police in the United States, Hungary, Bulgaria and Israel arrested 17 individuals accused of money laundering and wire fraud, United States Attorney for the District of Columbia Channing D. Phillips announced at a press conference.
Probe began in 2011
Authorities from the U.S. Department of Treasury and the Federal Bureau of Investigation say they uncovered the organized crime groups in 2011 when they discovered a makeshift call center operated out of a Washington hotel room.
The operation was used to post phony car ads online advertising cars, luring customers with prices far below market value. Once the customers placed a deposit for the cars, the fraudsters would cut off contact and disappear with the money, authorities said.
“Money mules” would then withdraw the cash and transport it in bulk to a network of money launderers in Europe, authorities said.
After investigating that scheme, authorities say they learned members of the group, which spanned Europe, Israel and the United States, had also scammed unnamed German and Portuguese companies out of millions of dollars in phony transactions in 2014 and 2015.
Fake email addresses used
Using fake email addresses to impersonate the chief executive or president of a company, authorities say the defendants would instruct mid-level employees to wire hundreds of thousands of dollars for a “secret” financial transaction, such as a corporate acquisition.
But the bank accounts were controlled by the criminals, who disappeared with the money, authorities said.