‘Online romance scam’ lands criminal enterprise thousands in COVID-19 cash, feds say
A U.S. citizen’s long-term romantic partner in Dubai was actually a scam artist trying to fleece states out of nearly $1 million in unemployment cash during the coronavirus pandemic, federal prosecutors said.
All but $60,000 of that money was blocked from being transferred, officials say, and the government just took close to $50,000 of it back.
A group of unidentified scammers submitted fake applications for unemployment benefits from an unnamed state using stolen information, the U.S. Department of Justice said Tuesday in a news release. They then recruited “unwitting money mules” with bank accounts in North Carolina to funnel the cash through.
“The individuals who opened the money mule accounts believed themselves to be engaged in online romantic relationships with the fraudsters,” according to the release.
States across the U.S. shored up their unemployment funds when the coronavirus hit in March, forcing millions of people out of work as businesses closed to slow the virus’ spread. Residents could apply for unemployment benefits online using their biographical data, banking information and employment history.
Citing an “immediate need,” a special agent with the U.S. Secret Service said in court filings that states receiving those online applications dispersed the funds “rapidly.“
Criminal enterprises took advantage of states trying to respond quickly.
One unnamed enterprise filed a slew of unemployment applications with a state — referred to only as “victim state” in court filings — using stolen personal information, the Secret Service agent said.
They then recruited people, many of whom were “not aware they are being exploited to carry out financial fraud,” to open bank accounts where the money could be sent, Tuesday’s news release states. The mules were reportedly instructed to conduct certain financial transactions, sometimes transferring that money to bank accounts overseas.
The accounts in this case were opened at Raleigh-based First Citizens Bank, according to warrants filed with the court.
In mid-May, an employee with the bank called law enforcement to report 100 customers had just received a total of $900,000 in direct deposits — but the names on the accounts didn’t match up with the beneficiaries of the unemployment funds, the warrant states.
The deposits ranged in value “from several hundred dollars to approximately $40,000,” according to court filings.
First Citizens Bank was able to reverse a large chunk of the fraudulent transfers into its customers’ accounts, the special agent said, but about $60,000 in transactions were completed.
On Tuesday, the U.S. Attorney’s Office for the Western District of North Carolina announced it had seized $48,742 back from 16 accounts.
“We will not allow scammers to profit from the COVID-19 crisis,” U.S. Attorney Andrew Murray said in the news release.
Investigators were able to track down some of the victims whose accounts had been used — one of whom was identified in court filings as a resident of Matthews, North Carolina.
The victim, identified as D.K., had reportedly been involved in an online relationship with someone in Dubai for the last three years and had sent the person $100,000 during that time, according to the warrant.
The romantic partner told D.K. they would be paying some of that money back when $8,500 showed up in D.K.’s bank account, the special agent said.
D.K. was then instructed to withdraw some of that money and send it to another person, according to court filings.
Investigators said D.K. hadn’t applied for unemployment benefits from the unidentified victim state where those funds originally came from, had never been a resident of that state and was not otherwise eligible for those benefits.
“If you are engaged in an online-only relationship and your paramour asks you to open a new bank account, or use your existing account to transfer funds, think twice,” Murray said in Tuesday’s news release. “A fraudster posing as a romantic online partner could be using you and your accounts as a repository to launder stolen money. Don’t let a scammer turn you into a money mule.”
The investigation is being led by the U.S. Secret Service and is ongoing, according to the news release. No criminal charges have been filed yet.
