MARKETPLACE

'They're nothing but financial terrorists': 60,000 Canadians have complained about the CRA phone scam

You've probably got the call: An automated message threatens you with arrest over unpaid taxes owed to Canada Revenue Agency. They may demand as little as $700 — though some have handed over more than $100,000.

CBC Marketplace went to Mumbai to track down one of the biggest cyberscamming operations targeting Canadians

A CBC Marketplace investigation into the CRA phone scam tracked some of the calls to this nondescript, low-rise apartment building in Mumbai. (Dave MacIntosh/CBC)

You've probably got the call: An automated message threatens you with arrest over unpaid taxes. Call back and you'll be further threatened by someone claiming to be an agent of Canada Revenue Agency.

They may demand as little as $700 — though some have handed over more than $100,000.

At least 60,000 Canadians have complained about being targeted by the phone scam over the past five years. More than $10 million dollars has been stolen in that same time period, making it one of the largest cyberscams in Canadian history.

After weeks of investigating and cultivating sources inside the scam centres, CBC's Marketplace tracked some of the calls to a nondescript, low-rise apartment building in one of Mumbai's seedier neighbourhoods.

When our team went to confront the scammers, a group of men — believed to be armed — gave chase through the crowded, sometimes dangerous alleyways of India's largest city.

David Common travels to India in an attempt to catch the fraudsters behind the CRA tax scam 1:14

"They're nothing but financial terrorists," said Ritesh Bhatia, a top cybercrime investigator in India. "It's a huge operation, a big industry."

Who falls for the scam?

Gehangir Rashidi, 63, funnelled an astounding $110,000 — his entire life savings, and then some — into bitcoin machines around Toronto after getting one of these threatening calls at home, saying he owed back taxes.

"I said 'I don't have it,'" Rashidi recalls telling the scammers. "They said, 'Go and borrow it from the bank. Go to a friend. Go to your employer. Go wherever you can to make money, but you have to pay."

Gehangir Rashidi lost $110,000 to the CRA phone scam, pulling money from his RRSP, savings and chequing accounts. He also borrowed from his son and against a line of credit. (Dave MacIntosh/CBC)

Rashidi is deeply embarrassed he fell for the scam now. But at the time, the immigrant believed a government would call and threaten a citizen; it happens in his native Iran.

Most potential victims simply hang up, or never return the call. But the scammers are also employing new tactics in an attempt to convince people to hand over their cash, from posing as a victim's accountant, to using technology which prevents a victim from hanging up the phone.

The most sought-after prey are often the most vulnerable in Canada: the elderly and new immigrants.

How the scammers do it?

Robo-dialers call Canadian cellphones and landlines en masse, leaving a message that tells the recipient to call back. Those who do begin with a "call opener" who typically outlines a series of threats, including arrest, loss of employment, seizure of assets, and even the removal of their children.

But just as quickly, they offer to help the caller clear his or her name through a quick payment and a reduced fine, often in the thousands of dollars.

If a caller agrees, they are transferred to a "call closer," much like in a sales operation, who continues listing off threats and outlines where the money should come from and how it should be transferred. These details are often described in such a way as to avoid raising the suspicions of a bank.

Ritesh Bhatia, a top cybercrime investigator in India, calls the CRA phone scam and others like it a 'huge operation' in India. (Dave MacIntosh/CBC)

After digging up information about a caller online, such as where they live and work, the scammers rely on mapping tools to identify the nearby banks, directing the victim to these locations.

In some cases, if you try to hang up — to call your accountant, bank or a family member — the scammers may use something known as call-trapping software, says Bhatia, which prevents your line from hanging up. The technology is more often used in espionage, but less reliable versions of the software can be purchased online, and may only trap a phone line for a couple of minutes.

That's what happened to a Toronto-area man we're calling Joe. Marketplace is protecting his identity, as he worries his employer will judge him for a mistake that cost him $36,600.

"Since I come in this country, I start to save money — it's about 28 years," he said.

The scammers were firm with Joe, but told him they were there to help. He was facing a tax problem, they said, but they could get him out of it — if he acted fast.

'Joe' describes the impact of losing more than $36,000 to the CRA tax scam:

'Joe' lost more than $36,000 to the CRA tax scam after receiving a threatening phone call 0:28

Joe was told to withdraw the cash and deposit it into a bitcoin machine. He went from branch to branch, drawing down his savings; he was instructed by the scammers to tell any suspicious bank employees he was buying furniture.

When Joe questioned them, they asked for his accountant's name, before seemingly dialing the phone. Another voice, pretending to be the accountant's office, confirmed the amount owing.

Other scammers in the operation were likely using this time to research details about Joe online, using the information to bolster their claims of legitimacy.

At the end of the call, when the money was sent, Joe said they laughed and hung up.

The scammers

Those carrying out the scam are young, usually in their 20s, and veterans of Mumbai's legitimate call centres, where English-language skills and an understanding of Western countries are a must.

The earning potential is huge: a typical month's salary can be earned in just one night. The more you steal from an unsuspecting Canadian, the more you take home.

Jayesh Dubey, a former call centre employee turned whistleblower, once profited from the scheme. "It was big money," he said. "I cannot make it anywhere [else]."

Jayesh Dubey is a former employee of one of these illegal call centres in Mumbai, but is now a whistleblower. The more money he scammed, the more he took home. (Dave MacIntosh/CBC)

The scam is especially lucrative for those at the top. One of the few kingpins to be arrested, Sagar (Shaggy) Thakkar, was in the process of buying a private plane when the Indian police swooped in.

Thakkar was swept up after a major raid that led to hundreds of arrests and prosecutions, after U.S. authorities got a tip and asked India to intervene in a similar IRS scam targeting Americans.

Since the high-profile arrests, criminal gangs have made their operations smaller and more agile, operating out of apartments or small commercial spaces that are easier to pack up and move. Fearful of being exposed, the masterminds often only hire those they know or those known to their existing staff.

Sudhir Kotian got the invite and went inside one of the scam centres with a hidden camera. Kotian was discovered and attacked, though he eventually managed to escape.

"I was screaming as they hit me — they hit me, hit me, hit me. They slapped me, hit me a lot. I was screaming, 'Save me, save me,' and walking backward, screaming loudly."

Kotian's hair was pulled and his clothing ripped; his phone, wallet and camera were all taken.

'Fraud is a global problem'

Indian police say they are ready to crack down on these operations, but need Canadian police to tell them about victims — and share details about the scammers.

Indian Police Commissioner Param Bir Singh said he only became aware that the scammers were targeting Canadians after he visited the RCMP website himself and saw a posting about it.

"Nobody contacted us from Canada. It doesn't seem right," he told Marketplace in an interview.

But in a statement later provided by the office of Public Safety Minister Ralph Goodale, said the RCMP is "most definitely" working with Indian law enforcement on CRA fraud-related complaints. The statement said: "Mr Singh is not among the partners the RCMP works with in India."

The statement also said that phone scams are part of what the National Cybercrime Co-ordination Unit, which was announced in the 2018 budget, will be tackling.

This man infiltrated one of the illegal call centres behind those fake CRA calls:

Sudhir says he was told to follow a script when talking to potential tax scam victims 0:58

The RCMP declined repeated requests for an on-camera interview on the CRA phone scam, and didn't answer questions about what specific actions they've taken to investigate the illegal overseas call centres.

"Fraud is a global problem without borders," the RCMP said in a statement. "By working with various municipal, provincial and national law enforcement and government partners, the RCMP is committed to preventing, detecting and deterring crimes that affect the economic integrity of Canada."

The federal policing agency added that "the best way" to combat these types of crime is through prevention. "Public awareness is an important tool in preventing the victimization of Canadians."

The Mounties also produce a regular report on cybercrime in Canada. In 2014, the report noted phone-based scams are notable for their frequency — part of a trend suggesting that cybercrime is on the rise.

The CRA has a warning on its website that it won't leave personal information on voicemail, and that its agents do not use "aggressive language" or threaten taxpayers with arrest. When in doubt, the CRA suggests you hang up and either check your account online or call the agency back at 1-800-959-8281.

Clarifications

  • After this story was published, the office of Public Safety Minister Ralph Goodale issued a statement to CBC News, saying that while the RCMP has not been working with Police Commissioner Param Bir Singh specifically, the agency is working with other members of Indian law enforcement agencies on the complaints.
    Sep 24, 2018 8:00 PM ET

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