MUMBAI (Reuters) - Americans were swindled out of tens of millions of dollars in an alleged tax scam that was run for about a year from call centers on the outskirts of Mumbai, a senior investigator said on Thursday, predicting more arrests on top of the 70 made so far.
Assistant police commissioner Bharat Shelke told Reuters the alleged scammers posed as U.S. Internal Revenue Service officials and left victims voicemails accusing them of tax evasion and threatening them with arrest.
“Fearing arrest, some used to call back, and employees at the call center then demanded a few thousand dollars to settle the case,” he said. In lieu of cash, employees also accepted alternatives such as numbers from unused iTunes and gift cards.
The 70 people arrested were among more than 700 detained when police raided makeshift call centers - a bungalow, an office building and a shopping center in the Mumbai suburb of Thane - late on Tuesday. Shelke said an estimated $36.5 million was extorted from U.S. residents.
On Thursday, a court granted police custody of all 70, including the owner of one of the call center buildings, until Oct. 10. But police said they have not yet captured the ring leaders of the scheme, which they suspect was run out of the western Indian state of Gujarat.
Authorities say callers were trained to switch their Indian accent for a passable American one. They studied a script six pages long that explained how conversations would develop, with tips on tackling doubts and suspicions.
According to training documents seen by Reuters, if targets asked for permission to speak to an attorney, workers were told to reply (sic): “This would be termed third party discloser, as per the federal law and if you go ahead and do that IRS will have completes right to go ahead discloser to national television, local newspaper and your employer. Moreover, it would be a penalty charges up to 50,000$.”
A police official said several of the call center workers were high school graduates who were “very convincing in recorded conversations.”
Callers were paid between 10,000 rupees ($150) and 70,000 rupees ($1,050) every month, police said.
An advertisement placed on Aug. 30 by one of the companies raided by police said it was a seeking a “call centre executive” to handle calls to the United States and Australia. Experience was not necessary. The salary was described as a “good hike” and the bonus “unlimited.”
Tax agencies in countries including the United States, Canada and Australia have all issued warnings over scam callers. Last year, a Pennsylvania man who helped coordinate a fraud in which India-based callers preyed on vulnerable Americans by pretending to be U.S. government agents was sentenced to 14-1/2 years in prison.
Police told the court on Thursday that employees applauded when victims transferred large sums electronically to the call center. “Employees were aware of the fraud, but since they were getting a good salary, they remained silent,” Shelke said.
The organizers of the scheme were cautious about paper trails, said another police official, Mukund Hatote. “Workers did not receive employment letters ... and [the organizers] rented office space without paperwork.”
The 70 detainees were driven to court in large vans. Most were young men who walked with heads bowed, their faces obscured by a raised hand or a tied kerchief. Inside, the judge heard arguments from about two dozen defense lawyers who insisted their clients were following orders, and that the scheme’s masterminds were still at large.
“I got to know we are doing illegal things within a week after joining,” one defendant told Reuters as he returned to a police van, “but I saw many getting good performance bonuses. So I didn’t leave.”
($1 = 66.7391 Indian rupees)
Additional reporting by Devidutta Tripathy, Danish Siddiqui, Swati Bhat Shetye in Mumbai; Editing by Euan Rocha and Mark Trevelyan