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Threats From Home: The Chinese Consulate Scam

Victims lose millions in phone scams that target the Chinese American community

Episode 47 of The Perfect Scam - Threats from Home: The Chinese Consulate Scam

AARP

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Chinese Americans are being targeted by scammers in schemes known as the “Chinese consulate scam” and the “blessing scam” through which victims have lost millions.

When Mandarin-language calls began to bombard residents across the U.S., authorities take a deeper look. They find that these illegal robocalls are targeting areas with large Chinese American populations.

Victims of the Chinese consulate scam are told they are in legal trouble with the Chinese government. The scammers then persuade them to hand over money or personal information to resolve the phony problem.

Victims lose $150,000 on average.

And, in Chinatowns across America, scammers are targeting older Chinese Americans in the blessing scam, aka the ghost scam. This scam uses some victims’ traditional beliefs to lure them into an elaborate con that involves a team of scammers who work in tandem to steal valuables and cash.

TIPS:  If you think you’ve been a victim of a scam or would like to report fraud call The Fraud Watch Network Helpline at 877-908-3360Anyone can become the victim of a scam, it’s important to be vigilant and know your vulnerabilities. For instance, if you are looking for a job, you are more vulnerable to a work-at-home scam.

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[00:00:01] Will: Coming up this week on AARP - The Perfect Scam.

[00:00:03] Some victims were crying to me when they were talking about it. Oh, I even put my necklace that I've been wearing for 40 years in that bag, and now it's all gone.

[00:00:17] Will: Welcome back to AARP - The Perfect Scam. I'm your host, Will Johnson and I'm here with AARP's Fraud Watch Network Ambassador, Frank Abagnale. Thanks for being here again.

[00:00:25] Frank Abagnale: Great to be here, Will, thank you.

[00:00:27] Will: Frank, we are talking this week about a, a scam that targets a specific community, a Chinese community, actually more than just one in fact. This is a big problem. But I think it certainly brings up the issue and the ongoing problem of the fact that scammers will go after any group they can and employ whatever tools or tactics they can to get money out of them.

[00:00:50] Frank Abagnale: Absolutely, and in this case, you know just the fact of the culture of people who are from China, and the fear of the Chinese government, that's two factors right away to make a scam work if I take those two things in combination and apply them against my victim.

[00:01:04] Will: And we'll get into it. We'll hear about how they say it's the Chinese Embassy calling or one thing or another. Another aspect of this that we'll hear about that the scammers play off of is the concern, and we've talked about this with other scams where older people don't want to admit they've been scammed or talk about it because they don't want to be seen as somebody who can't take care of themselves. In some cases, we're told in this story, in, in the Chinese community that's especially an issue for older people where they don't want to be seen as weak or vulnerable.

[00:01:37] Frank Abagnale: And, you know, people I think have a big fear of being ashamed about something like that, and they shouldn't be as we've said so many times that anybody can be victimized and there's nothing to be ashamed about it.

[00:01:50] Will: All right, let's get into this week's story.

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[00:01:53] Will: If you're older, there's a scammer for you. If you're young and just getting started in a career and life, there's a scammer for you. If you're looking for love, there's a scammer for you. If you're in the military, there's a scammer for you. There's a scammer for just about everyone. Every day they're waking up thinking of new ways to get your money. All of us have the power to protect ourselves, to know how to spot a scam, but the trick is when the scammers are already one step ahead of us. This week we'll tell you about scammers that target a very specific segment of the population, in this case, Chinese Americans. Ed Bartholme is Associate Bureau Chief in the Consumer and Governmental Affairs Bureau at the FCC.

[00:02:30] Ed Bartholme: The Chinese Consulate or Chinese Embassy scam is an in-language scam.

[00:02:35] Will: What is an in-language?

[00:02:35] Ed Bartholme: So it's done in Mandarin, um, so the call, you know, the voicemail that you might hear or the, if you answer the call the, the person speaking will be speaking in Mandarin.

[00:02:46] Will: And these are live calls, not robo calls.

[00:02:48] Ed Bartholme: They're using auto dialers, so there is a robo call aspect to it, um, typically there's that sort of slight delay, um, if you do answer before you hear someone start to speak.

[00:02:59] Will: The first step for scammers in this scenario is to gather a list, a long list of Chinese Americans in various US cities.

[00:03:06] Ed Bartholme: And they've gathered information from breaches or from the Dark Web and other sort of classic, you know, information gathering spots that scammers hang out and congregate together, and what they do is they'll look for areas of the country where people have higher populations than others. So think of, you know, the, along the Pacific Coast, San Francisco, major cities, metropolitan areas, DC, New York, they'll get bursts of these calls that are just um, I sort of say it's tuned in, right, so they, they turn the dial to the 202 area code and then whatever's next 7 digits that it lands on, um, is where they direct that traffic.

[00:03:46] Will: Interestingly, when one of these scams spiked about a year ago, the call screening company noticed something else about the pattern of calls.

[00:03:53] Ed Bartholme: Then they started to notice these like odd one-off area code pockets that were being targeted. And when they started to dig a little deeper and looked into population data census figures, what, what they were finding is, is that all of these areas had higher than average percentages of Chinese immigrants, from different points in time. So, they definitely do their homework, and they know where to tune the dial to target and try to find people.

[00:04:18] Will: And once someone picks up and answers, the scammers are off to the races setting the hook.

[00:04:23] Ed Bartholme: They're telling them that there's a legal problem that they need to resolve, there's a package that they need to facilitate delivery of. It might be that someone was stopped at an airport in China, uh, that had your passport, or your personal documents and you need it for questioning to resolve that issue.

[00:04:42] Will: So using a pretty classic scam tactic of putting fear into someone that they've got to deal with something, and they've got to deal with it now.

[00:04:48] Ed Bartholme: Right exactly. It's very much fear driven.

[00:04:50] Will: And what are they getting from the people they're calling? Information or money or both?

[00:04:54] Ed Bartholme: Both.

[00:04:54] Will: Okay.

[00:04:55] Ed Bartholme: So they ask is for information to clear this up, it's money, whether it's cash through the mail sometimes. It might be instructing you to go out and buy a gift card, um, you know, read the numbers off the back, but it's money, and it needs to happen quickly.

[00:05:08] Will: First step, use a fear tactic to get the victim listening. Second step make it urgent, something that needs to be taken care of right away.

[00:05:15] Ed Bartholme: A big thing is the urgency. Avoid the urgency. Take that time to disconnect. One of our biggest talking points on this issue broadly is, if you don't recognize the number, don't answer. Let it go to voice mail. Listen to the message, take time to process the message. This scam does involve messages being left, so they will leave you a voice mail, but then you have time to independently verify the information in that voice mail. You can look up the local consulate or embassy number based on whatever one's closest to where you live in the country. You can verify and do some research about this type of thing online before you make the call back if you feel the need to make the call back. And then you're better equipped when you start that conversation.

[00:05:56] Will: I would imagine they're reaching people who are, you know speak, if they're able to get to someone who speaks Mandarin Chinese, it may be someone who's newly immigrated to the United States, it may be family who's been here for generations and generations, but that fear tactic combined with someone who may not have been in the country for that long or has arrived recently is really terrifying to think about.

[00:06:15] Ed Bartholme: It is, and sometimes it's students who are here on visas or other temporary stay situations, and they're really honing in on this sort of, you're going to have to go home, you're not going to be able to stay in this country.

[00:06:26] Will: Unlike some of the scams we've been telling you about recently, these scammers aren't always asking for gift card numbers or wire transfers.

[00:06:33] Ed Bartholme: We've also heard of, with this scam specifically, just sort of cash. Cash through the mail type of, of requests as well.

[00:06:39] Will: And like many of our recent scam stories, spoofing comes into the picture.

[00:06:44] Ed Bartholme: We did find out is that they were using our toll-free number, so they were, they were masking spoofing as 888-CALLFCC. So spoofing is a tactic that scammers use to hide the identity of where the call's really coming from, um, and we were one of a, a variety of government agencies and entities that, that this scam and others have used to impersonate a relationship with the federal government. So the tactic would be calling from the FCC in relationship with the Chinese consulate to get this matter resolved under whatever pretext that leads to.

[00:07:15] Will: The FCC, the FTC, the FBI, they're all aware of these in-language scams, and of course, they're not all targeting Chinese Americans.

[00:07:23] Ed Bartholme: So, I, I think that there's a, a sense of a targeting toward limited English proficiency more broadly, but it's all around social engineering, so it's, it's the concept that because they're limited English, they're not going to understand fully the nature of what's being asked or what's being explained to them sometimes, and they're less likely to talk about it, because they don't have those community connection points, those touchpoints; they might not feel comfortable reaching out to local law enforcement, because they might not feel like they can express what happened to them or share their story.

[00:07:54] Will: In some cases, scammers are preying on the Hispanic population of the US using immigration issues as a way to ignite fear and urgency.

[00:08:02] Ed Bartholme: And it's this sort of knowledge of the person being isolated and the limited language proficiency, and also the, the mistrust of government comes into play too. Um, and that's not unique to the Chinese language speaking community.

[00:08:16] Will: So who are these scammers, how much are they getting? In some cases, massive amounts of money is going overseas.

[00:08:23] Ed Bartholme: The FBI, in their release, did mention that a lot of the funds do end up back in Hong Kong and mainland China. Um, so that's where they're seeing the money flow to. I think there were, they cite $40 million US dollars lost between December 2017 and February 2019 to this scam, and that's an average loss of $164,000 per incident reported to them.

[00:08:45] Will: Wow. So one person could be somehow sending that much money?

[00:08:49] Ed Bartholme: Right, and I, it's my understanding is when you get to that high a dollar amount, it's repeated interaction.

[00:08:57] Will: Alan Lai is the Victim Service Director for AARP in Seattle. He's also well versed in these in-language scams, but Alan tells us about another scam targeting Chinese victims. This one is more complicated and it's in person. It's called The Blessing Scam.

[00:09:12] Alan Lai: The Blessing Scam is also taking advantage of the victims' superstitious belief, traditional belief.

[00:09:22] Will: The scam has been reported dozens of times in Seattle's Chinatown and in Chinese communities around the country. New York, San Francisco, LA, and elsewhere. The scam targets older Chinese women.

[00:09:34] Alan Lai: And then scammer number one would come up, "Hey, ma'am, uh or Granmom, you know, I'm looking for this Chinese herbalist. I need him to help my daughter." "Oh, well, oh I don't know this uh Chinese herbalist. I don't know where he is."

[00:09:53] Will: But the man, the scammer goes on asking the older woman for help. At that point the second scammer arrives on the scene.

[00:09:59] Alan Lai: "Hey, you're looking for the herbalist? I'm looking for him, too. My husband has cancer. Only he can cure my husband. Let's go find him together."

[00:10:09] Will: The two scammers using the victim's dialect kept the conversation going, getting to know details about the victim's life.

[00:10:16] Alan Lai: "Oh, you're from Shanghai, she's from Shanghai too. Oh, how many kids do you have?" "Oh, two boys? One daughter? Oh, who's the best, you know." "Oh, my youngest son." So they get some personal information of the victim.

[00:10:30] Will: At that point, a third scammer says he knows the herbalist, in fact, it's his grandfather and he goes to find him. Minutes later, he comes back and using that information the first scammers were able to get from the victim, he starts to convince her that his grandfather truly has amazing skills.

[00:10:45] Alan Lai: "Oh my grandfather was asking me if you are from Shanghai." Bingo, wow. The victim is like, wow, your grandfather must be very good. He hasn't met me, and he knows I'm from Shanghai. "My grandfather was asking if you have three kids; you have two sons and one daughter." "Oh, well right on. Yeah, indeed, I have two sons and one daughter."

[00:11:10] Will: And then the scammers really set the hook.

[00:11:13] Alan Lai: "And my grandfather said there was a tragic accident, a fatal accident that happened in Chinatown last year. A woman was killed in the accident. Your youngest son must have stepped on the breath of that uh female victim, and the female victim is a ghost now. She's set her eyes on your younger son. She's going to marry your younger son tonight." So now all these, victims are older Chinese women, and they have listened and they, that the ghost stories, the ghost stories. And the fear kicks in. That means my son would die.

[00:12:00] Will: A play on superstition and fear, the scammer makes his final move.

[00:12:04] Alan Lai: "So my grandfather said he can help you, but go home, get all your personal jewelries, bring all your personal cash and put them in this black bag, and come back here as quickly as you can." And then they will throw in some Chinese proverb. "This is heavenly secret. Do not leak any heavenly secret." That means they're trying to tell the victims, don't tell anybody. Because if they talk to other people, they, you know, they, then they will tell them it's a scam. So they would go to get their cash at home and a lot of these senior citizens have a lot of cash at home.

[00:12:47] Will: The older woman goes home, gets her cash and valuables, and brings it back to the scammers in a black bag.

[00:12:53] Alan Lai: You remember there are three scammers, trying to help her. They can easily distract her and then exchange it. "Oh, let me take this back to my grandfather, and he'll do the blessing to you and your son will be saved." And then she come back, "Now take this back home. Put it in the corner of the closet, wait 7 days before you open it." So by the time they open up the bag all the cash, all the jewelry are gone. So most victims, when they are scammed, they lost 20, 30 thousand dollar worth of cash and 20, 30,000 dollar of their jewelry.

[00:13:34] Will: The Blessing Scam takes advantage of victims who are older, and often they don't want to talk about being scammer.

[00:13:39] Alan Lai: They are afraid of uh, when I tell other people I'm scammed, that is a sign of my incompetence. They don't like to go to senior home. For example, if they are living by themselves, oh, then my son, my daughter will be saying, "Hey, Mom. See, that is another evidence of you're not being competent. I will, let me take you to a nursing home." And they don't like living in nursing home, and the living in nursing home is a symbol of my son not taking care of me and that is losing face, in Chinese, in the Asian communities, but losing face is huge, and uh, and then there's another proverb that says... it's very hard for me to get victims to come talk to you guys, to the media, because they said, uh, there's another proverb that says, it's, uh, "(inaudible) you don't want to be too fat, because if you're fat, you're the first to be butchered." As a human being, you don't want to be famous the wrong way. I don't want to be telling everybody how I was scammed. That was losing face big time, not losing face myself, it's, you know, is lose, is to have bringing a bad reputation to the family tree.

[00:14:53] It just sounds like there's so many cultural factors at play that make the Chinese community especially vulnerable.

[00:14:58] Alan Lai: That's, uh very true, and also there was language barrier, reporting to the police a little bit late, thinking too much, and then the perp--, sometimes the perpetrators are long gone.

[00:15:10] Will: The fact that The Blessing Scam is in person puts it in another realm of scams. These are criminals who are willing to approach victims on the street to get their money, and they're preying on their vulnerabilities. So the tactics are largely the same as a scammer on the end of a phone line. And when it comes to the Chinese Consulate Scam, the FCC Is making it a priority to educate and inform the Chinese community about the scams.

[00:15:33] Ed Bartholme: So unwanted calls are the Agency's, the Chairman's top consumer protection priority. Uh, one of the things that we did, and this is actually something that we were able to take advantage of ourselves when we found out about the Chinese consulate scam making use of our 888-FCC number, we created something called the Do Not Originate list. So the FCC, the IRS, if you remember when the IRS scam was really big, they were using the 1040 number, the toll-free number. Um, now those can all be put on a do not originate list so that when carriers see a number coming across their network that's using, that's spoofing one of those do not originate numbers, they can stop that traffic right away. So that's a big blocking initiative that we started back in 2017 at the FCC.

[00:16:16] Will: What's going on with the Do Not Call list? Was that an FCC initiative?

[00:16:19] Ed Bartholme: So FTC does Do Not Call list.

[00:16:22] Will: Okay, your sister agency.

[00:16:23] Ed Bartholme: Sister agency. Big misconception is that it doesn't work. Um, FTC and, and we say that it does work. Um, it stops legitimate telemarketers from calling you. As I'm sure you guys know, scammers don't bother with legitimacy. They're not going to, going to check that list and, and see who's on it before they decide to try to rip you off.

[00:16:42] Will: Right. So if you're getting all sorts of robo calls and, and garbage on your phone, and you think it's because the Do Not Call list is not working, it's just 'cause bad guys are still doing their work.

[00:16:52] Ed Bartholme: Right. They're ignoring, they're not following the law to start with.

[00:16:55] Will: Right, which makes sense.

[00:16:56] Ed Bartholme: We're also taking uh some other steps around caller ID authentication. So this is where we are encouraging the carriers to implement technology that will sort of pass through additional signature information as a call travels across networks, and then they're better equipped to tell you or the end user, if this is really who it's saying it is on the caller ID, um, and it also really does a lot to help with trace back efforts. So that's efforts that the carriers can use once they know someone is a bad actor, to then figure out where that bad actor's operating from and which carriers are generating that traffic.

[00:17:32] Will: So that's all the manipulation of numbers that you see a number coming up and, and it could be from somebody that you think is in your neighborhood or from a company, and it's not that company.

[00:17:41] Ed Bartholme: Right. It's just telling the phone to mask the first six digits of the number that it's making the outbound calls.

[00:17:47] Will: And that's the scourge of robo calls, it seems or, or fake calls, unwanted calls.

[00:17:51] Ed Bartholme: That's been the trend in traffic lately and what, what you find is when we, we go out and we travel and we talk to people across the country to share educational tips is, you know, it's somebody from my church, it's another parent on my kid's soccer team who, that's why I'm going to pick up this call. Um, so it does instill a sense of trust in a lot of people.

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[00:18:13] Will: All right, so Frank, I think what this underscores again is that scammers will go after any group they have, they're constantly finding new groups to go after, in this case, Chinese Americans, but there are in-language scams of all sorts of different languages, whether it's Spanish or French or German, you, you name it. And the same rules apply to all of us, no matter what language you're speaking to stop and verify.

[00:18:35] Frank Abagnale: Absolutely. And again, what you just said, they go after any nationality, any race, uh if they can put the two together for that something is reasonable to that particular race, or reasonable to someone who speaks that particular language or from that particular country, that just makes it easier to make it more convincing and get the scam to work better. So anybody can be a target.

[00:18:58] Will: And Frank, this is really a case of a fear tactic, where you're making somebody, I mean you mentioned you may have a, a fear of, you know, something you didn't do right before you left home, or paperwork you need to fill out. It's putting somebody on the spot, and whenever you feel that fear which is really common in scams, where you feel put on the spot and you've got to react immediately, that's really a red flag.

[00:19:19] Frank Abagnale: That's really a red flag, and that's the time when you need to talk to someone. There's, again, resources. You could call the embassy and ask them about it. You could call, which I always recommend, the Attorney General's Office and speak to someone in consumer protection. If you don't speak English, you get someone that does speak English to be able to talk for you and ask the question, or you can call the Fraud Watch Network. Again, where very skilled people would have the answer to explain to you that this is an in-language scam, and this is how it works and it's not really the embassy calling you, uh that people will walk you through it. So, the resources are out there, but you have to make the effort to pick up the phone, make the call, but I certainly would make that effort before I'd part with any money.

[00:20:01] Will: Because there are certainly people, as many bad guys and scammers out there, there are certainly many, many more times people who are out there working for you who want to protect you, who want to help you, who want to make sure that you're not caught up in a scam, and really being victimized uh having your money stolen, all sorts of things.

[00:20:20] Frank Abagnale: And as I've always said, basically people are truly honest, and because they're honest, they will help you. If they think someone's trying to rip you off, they will help you get the answer to your question.

[00:20:31]Will: We'll be back next week to help you some more, tell you some more stories of scams and how the bad guys are trying to get our money and ways that you can avoid it. Thanks for being here with us, Frank.

[00:20:41] Frank Abagnale: Thanks, Will.

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[00:20:42] Will: If you or someone you know has been the victim of a fraud or scam, call AARP's Fraud Watch Network Helpline at 877-908-3360. Thank you to my team of scambusters, producers Julie Getz and Brook Ellis. Our audio engineer, Julio Gonzales, and of course, my cohost, Frank Abagnale. Be sure to find us on Apple Podcast or wherever you listen to podcasts. For AARP - The Perfect Scam, I'm Will Johnson.

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