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Grandkids Scam Ring Busted

7 arrested in Canada for allegedly duping American grandparents out of $3 million

En español | A crime ring believed to have swindled as much as $3 million since November from trusting grandparents in 36 states was busted this week in Canada, police there report. Officials say the arrests shut down a "massive" operation behind the "Grandkids Scam" that has targeted AARP members and others for years.

The seven people arrested in Toronto and Montreal since Sunday — two as they were about to fly to Italy — are accused of making some 200 telephone calls a day claiming to be grandchildren in dire need of cash.

On average, 15 to 20 American grandparents per day fell for this ruse, sending between $2,500 and $6,000 each to the scammers by wire transfer, says Superintendent Chris Perkins of the Halton Regional Police Service, the Toronto-area department that oversaw the investigation code-named Project Viper.

Many of the telephone and Internet scams that prey on Americans are operated from outside the country, beyond the direct reach of U.S. law enforcement authorities. The arrest of an entire ring of alleged scammers is unusual.

The scammers made their calls from a Toronto-area basement, Perkins tells the Bulletin. They allegedly identified potential victims by paying telemarketing companies for specialized calling lists that note the names and phone numbers of older people, often those living in over-50 communities.

"When we raided their boiler room, the home of a relative of one of those arrested, we seized a stack of telephone lists that was 8 or 9 inches thick," Perkins says. More than 20,000 Canadian dollars were also confiscated.

"There was no bank of phones like the old days, just smartphones and laptop computers," says Perkins. "In this kind of scam, you can operate from a car. All you need is a cellphone and away you go."

The scammers, four men and three women between ages 26 and 41, dialed people believed to be grandparents in states as far afield as Maine and Texas, North Dakota and Florida. They also made calls to households in Canada.

Typically, one member of the ring would begin the call by saying something like, "Hi Grandma, it's me, your favorite grandson."

"The hope was that the grandparents would respond, 'David, is that you?' And he'd say, 'Yes,' to get more information," says Perkins.

"In most cases, they were cold calls aimed at tricking the grandparents," says Perkins.

In some cases, however, the fraudsters tried to make their ruse more believable by first gleaning the names of the targets' grandchildren through a social networking website such as Facebook, or through obituaries published on newspaper websites.

The caller would typically go on to tell a story of being arrested while vacationing in Canada and being afraid to tell the parents about it. After a plea for bail money, the phone would be handed to an accomplice claiming to be a lawyer or police officer. Instructions on how and where to send the bogus bail money by wire transfer would be given.

Perkins said he believes the seven arrested may have been operating for years.

The grandkids scam — also known as the emergency scam — first came to light in mid-2008, and despite generating a lot of publicity and several Scam Alert warnings, continues to thrive.

"We started our investigation in the summer," says Perkins, "but moved very quickly in recent weeks, as we were astounded at the sheer volume and success [of their scheme]. We had to shut it down."

Two of the suspects were arrested in Montreal on Feb. 21, as they were about to board a flight to Rome. "The information we have is that they were planning to start a similar [scam] in Spain," says Perkins. Noting that the investigation is continuing, he would not comment on how the suspects were identified, other than to cite "good old-fashioned police work."

The accused are scheduled to appear in court on Feb. 25, charged with multiple counts of fraud, participating in a criminal organization and impersonating police. If convicted, Perkins says "they face a serious period of incarceration."

Perkins says that while this group of phony grandkids is out of business, similar rings continue with this common ploy: "The fact that senior citizens are still falling for this scam is tragic."

So if you get a phone call from a "grandchild" in need, don't take the bait. It's likely a scammer on the line. But if curiosity — and your devotion to your grandkids — get the best of you, here's how to protect yourself:

  • Don't fill in the blanks. If the caller says, "It's your granddaughter," respond with "Which one?" Most likely, the caller will then hang up.

  • If the caller properly identifies himself or herself as your grandchild, ask for family details, such as the name of a family pet, a favorite vacation spot or the anniversary of the grandchild's parents, assuming that this information is not on your Facebook account.

  • Ask the caller for a callback number for the police station or hospital where he or she is allegedly located, and then verify that number with an online search of the facility. Sometimes the scammers pretend to be grandchildren who were injured and need money for medical care.

  • Say you will return the call to your grandchild's cellphone (but don't ask the caller for the number). If you don't have the number, contact a trusted family member to ask for it.

  • Be mum on account numbers. Although phony grandkids usually request wire transfers, some may ask for your bank or credit card account numbers.

  • Always verify claims of a grandchild's trouble with their parents.

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.