FBI Nabs Unsecured Personal Loans Scammers
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UPDATED: Jul 27, 2012
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An international criminal group of unsecured personal loans scammers has been charged by federal authorities with operating a loan-fraud scheme.
In Buffalo, 33 people were charged with criminal activity, 10 of whom are American and 23 Canadian, according to a Businessweek article.
The defendants are charged with conspiracy to commit wire fraud and launder money. The maximum sentence for committing wire fraud is 20 years and a $250,000 fine. The maximum sentencing for conspiring to launder money carries a maximum sentence of 20 years and a fine that is twice the amount of the property involved in the criminal activity.
The criminals allegedly operated out of the Toronto area and victimized 2,000 victims across the US.
According to officials, the criminals used websites, newspaper ads and search engines that directed prospective borrowers to applications for unsecured personal loans offered by non-existent lenders. Victims with poor credit were targeted and requested to pay upfront fees for loans that were never lent out, thus robbing the victims of money used for those initial down payments.
The criminal group allegedly formed 67 fictitious lenders that baited unsuspecting borrowers. The criminals insidiously used names very similar to existing legitimate lenders. In order to continue profiting off the misfortune of others, the criminals would abandon old websites and develop new ones. This allowed them to continue their criminal operations after victims had realized they had been scammed.
The criminals stole nearly $3 million over seven years with their fraudulent unsecured personal loans.
Authorities were tipped off about suspicious money transfers at a Buffalo grocery store.
The combined efforts of Homeland Security, Customs and Border Protection, Canada Border Services Agency and the Federal Trade Commission were responsible for conducting the joint investigation on the unsecured personal loans crimes. Authorities revealed that the criminal group had operated since 2005.
“As a result of this investigation by Homeland Security Investigations, a major international criminal network has been disrupted,” said John Morton, director of U.S. Immigration and Customers Enforcement.
Morton is a leader within the Homeland Security Investigations division in Buffalo and pursued the criminal organization with assistance from the U.S. Attorney’s Office in the Western District of New York.