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Consumers Tricked into Buying Software in a Tech Support Scam

The operation targeted thousands of people across the world

Episode 54 - The Perfect Scam graphic image

AARP


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A pop-up appears on your computer screen, freezing the browser. It warns that your computer has been infected with malware and urges you to call a toll-free number for assistance. The number connects you to Client Care Experts, and the person who answers claims to be an IT specialist. But the person on the other end of the line is no expert. He is one of more than a hundred employees who are sitting in a boiler room in Florida, answering calls day and night, making false claims and manipulating callers into buying software they don’t need. This may sound like a typical IT scam. However, before it is shut down, Client Care Experts’ meticulously run scam will steal more than $25 million dollars from 40,000 victims around the world.

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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.

(MUSIC SEGUE)

[00:00:01] Julie: This week on AARP's The Perfect Scam.

[00:00:04] This message that you're seeing up here on the screen, sir, is a security message.

[00:00:09] How does that get on there?

[00:00:10] It's from the internet, sir. You just don't have malware protection.

[00:00:15] Everybody knows what you're doing is completely asinine. You're just trying to make as much money as possible. The whole thing was manipulation.

(MUSIC SEGUE)

[00:00:26] Julie: Welcome back to AARP's The Perfect Scam. I'm Julie Getz, and with me is Fraud Watch Network Ambassador, Frank Abagnale. It's great to have you back.

[00:00:34] Frank Abagnale: It's great to be here, thanks for having me.

[00:00:36] Julie: Today we're talking about tech support scams. I feel like we hear about tech support scam busts pretty regularly in the news headlines. Will this type of scam ever go away?

[00:00:46] Frank Abagnale: No, because the problem we have today is that these scam artists are all over the world. They operate out of more than 115 countries. So they're in China, they're in, uh, they're in Moscow, they're in Jamaica, they're all over the world, so it’s very difficult even when we know exactly where they are, or what address they're at, we don't have the authority to go over to Moscow and arrest anyone. Then we'd have to extradite them back to the United States. That would be extremely difficult to do. So the one thing that technology and the internet has done and it has made it very easy to commit crimes and commit them from thousands of miles away; you never see your victim, the victim never sees you, and even again when we know who they are or because it's thousands of miles away, we don’t have the ability to police that or bring someone back. So I think uh you're dreaming if you think the scams will go away. They're only going to get worse and more of them. You have to be a little smarter and a little wiser consumer today. You have to learn these things; educate yourself about these things. Obviously, just listening to what we said, when that pop-up comes, you go, I already know, I already heard about this, this is a scam. And that's why education is so important.

[00:01:52] Julie: Thanks, Frank. We'll be back to talk more with you later. But now we're going to move onto today's story. It's about a brazen tech support scam that originated in South Florida. The company targeted the elderly and ultimately bilked more than 40,000 consumers out of more than 25 million dollars.

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[00:02:11] Julie: US Postal Inspector from the Southern District of Illinois, Adam Latham, is joining me from St. Louis. He's going to help us dig into the details of this story.

[00:02:20] Julie: Good morning, Adam, it's Julie Getz with The Perfect Scam Podcast. How are you?

[00:02:23] Adam Latham: Hi, Julie, I'm doing just fine. How are you doing?

[00:02:25] Julie: Good. Adam, last time you were a guest on this show, you spoke with us about a high profile romance scam that originated overseas. For new listeners, that would be episode 25 and 26 which you can find on our website and listen to at any time. But today, we're not going to talk about romance scams, instead, we're here to talk about a computer tech telemarketing scam that Adam helped bring down.

[00:02:48] Adam Latham: That's correct.

[00:02:49] Julie: Adam, before we get into this story, I just want to clear this up for our listeners. What does a US Postal Inspector do?

[00:02:55] Adam Latham: Postal Inspectors are federal agents who enforce laws that relate to the United States Postal Service. So we investigate uh drugs through the mail, child pornography through, through the mail. If there's a robbery at a post office, if a carrier gets assaulted, or uh occasionally a homicide, we're the investigative agency that um, that deals with that. We also investigate mail fraud, and that's my specialty.

[00:03:22] Julie: So when Adam is notified about a tech support telemarketing scam involving mail and wire fraud, he and his team begin their investigation.

[00:03:31] Adam Latham: Back in January of 2016, the Federal Trade Commission told us that there was an increasingly large number of complaints to them regarding this tech support scam. So they told us that it involved uh owners of computers receiving scary pop-ups on their screens that said, "You have a virus, you may have a virus, uh, don't shut down your computer. Call us immediately or you risk losing your personal data, your photos, access to your bank accounts," that type of thing. Um, and then when people call in, they're told that they have to pay money to get rid of this pop-up. Um, and also, they need to pay money for extra virus protection software.

[00:04:16] Julie: The scam sounded a bit like this:

[00:04:18] Now would you consider yourself computer savvy?

[00:04:22] No.

[00:04:22] Okay, well Real Fine Protection Software is recommended for people who aren't exactly computer savvy because you do get a live certified technician that monitors the system for you.

[00:04:32] Julie: Okay. So after you receive the notification from the FTC, what do you and your team do next?

[00:04:37] Adam Latham: The Federal Trade Commission told us what the names of the businesses were that were generating, generating the largest number of complaints. Many of them are in India. We decided, kind of strategically, that that might be a too difficult of a task to take on initially, because it would be hard to extradite and hard to investigate subjects that are in the country of India. So, we looked for a domestic company; the Federal Trade Commission told us about this company that was operating out of the state of Florida. We were put in contact with the Florida Attorney General's Office, and we partnered with them to do a parallel criminal investigation of the same company.

[00:05:18] Julie: The company that Latham and his colleagues focused on what called Client Care Experts. They operated out of Boynton Beach, and the scam sounded a little bit like this.

(MUSIC SEGUE)

[00:05:27] This message that you're seeing up here on the screen, sir, is a security message, okay? It's a suspicious connection message that could access your log in, your banking details, and tracking your internet activity. The stock market, whatever your...

[00:05:41] Hold on, how, how did that get on there?

[00:05:44] Because...

[00:05:46] Did it get on there by my computer?

[00:05:48] It's from the internet, sir. Whatever you were doing on the computer; it could have been those World War II pictures that you were looking at or something like that, and it caused this type of a issue on the computer. You just don't have malware protection, sir. That's really what it comes down to. This security only comes in a 36-month license, and I have a 36-month license typically by itself is $399.99 for 36 months. I would need to get you that verification for the credits, but the credits will bring your security installation down to $199.99 and that would cover 36 months, sir, it's 36 months for almost $200 which is about $5 a month.

[00:06:30] Adam Latham: They had an entire floor of a very large business park building. It was just tables and tables of little cubicles with phones and computer monitors. And the people were sitting there at their cubicles staring at their computer monitors and taking calls all day long. And they were probably 150 employees. They were running two shifts, so they were operating early morning to late at night so they could cover both coasts, and they just had massive numbers of calls coming in each day from victims around the country and, and even around the world.

[00:07:05] Julie: The company is running a classic tech scam targeting senior citizens and others who don't often have a lot of technical know-how.

[00:07:13] Adam Latham: They were counting on the fact that a pop-up that locks your screen and has scary wording on it is going to frighten people enough that they will call in.

[00:07:23] If I turned my computer off and turned it back on and reprogrammed, would that message go away?

[00:07:31] No, it would not go away. The message would not go away and your computer would still be at a security risk. So I mean, you get, you getting rid of a message is not going to, not going to fix the problem.

[00:07:44] Well I don't have a problem possibly, just that I don't have malware. But I have absolutely no--, nobody's attacked it yet or, or corrupted me. Is that correct?

[00:07:55] No, you can't, you can't confirm that. No, that's not correct. So you don't receive this message for no reason on your computer.

[00:08:02] Julie: Client Care Experts has victims in all 50 states. Many of them are in Latham's territory.

[00:08:08] Adam Latham: I cover Southern Illinois and eastern part of Missouri, so I contacted some local victims, interviewed them personally to corroborate what I was reading in the complaints.

[00:08:18] Julie: While Latham gathers firsthand accounts, the Florida Attorney General's Office is setting up a sting.

[00:08:23] Adam Latham: The Florida Attorney General's Office sent an undercover investigator in to pretend to apply for a job, so she was able to go in and get kind of some intel on what the boiler room was like. They set up a brand new computer; there was nothing wrong with it, there was no viruses on it, no malware or anything. They called in the company, and the company basically told them that there was problems with the computer and sold them services that they did not need because they really did have a virtually brand new computer and the telemarketers, nonetheless, told them that there was a problem. So all of that basic investigative stuff allowed a judge to agree that we had evidence of a crime being committed, and so we got a search warrant to enter the place for June of 2016.

(MUSIC SEGUE)

[00:09:14] Julie: When investigators arrive on the scene, reporter Chris Nagus from KMOB TV in St. Louis is there to cover it.

[00:09:20] Chris Nagus: I had heard some information that this might occurring, and I was able to get down to Boynton Beach, Florida, as this raid was occurring. At 8 o'clock in the morning, you see the federal authorities roll up, and within a few minutes employees that worked at this Client Care Experts began spilling out the doors, and we had an opportunity to speak to multiple people that work there about what was happening inside this building.

[00:09:43] Chris Nagus: Can you tell us what's going on up there?

[00:09:44] Yeah, they just got raided.

[00:09:46] Chris Nagus: And as we started to engage some of these employees, some of them were pretty open. Some of them told us, you know, they were worried that they were working at a scam.

[00:09:55] Within, you know, a 12-hour day, I see them make anywhere from $100,000 plus on the board.

[00:10:01] Chris Nagus: And how do you know that?

[00:10:02] Uh, because they have a giant screen up there, and the screen tells what the profit and everything was for the day.

[00:10:08] Chris Nagus: What stood out to me how just regular, every day, innocent people got entangled in this thing. There was a woman, and I'll never forget when she came up to the camera; we interviewed her.

[00:10:16] I'm like freaking out right now. It's my third day in and like my husband, he told me to, to quit.

[00:10:22] Chris Nagus: She's probably still in training at that point, learning the ropes and the next thing you know, you've got Federal authorities walking in telling everybody you know that they're serving a warrant. Imagine going to work and being in the middle of something like that.

(MUSIC SEGUE)

[00:10:39] Julie: Adam, we just heard about what the scene was like outside the building. What was going on inside?

[00:10:44] Adam Latham: This was what we kind of call a soft entry. If we were going to do a search warrant on a place where we thought there might be danger, we would go in kind of hard with guns drawn, but this was a business. So we went into the business, showed them our credentials and let them know that there was a search warrant and that we were there to shut the place down while we conducted a search.

[00:11:07] Julie: The owners, how did they respond to this?

[00:11:10] Adam Latham: They just basically called their attorneys and sat out of the way while we continued with our search. They were cooperative.

[00:11:17] Julie: Did you find anything surprising in the raid?

[00:11:19] Adam Latham: What was kind of surprising and was good evidence is that the company actually recorded the last 30 days of all of their sales calls. So, we were able to get several thousand calls, 'cause they did such a high volume of calls. So we were able to hear the various lies and things that the telemarketers were telling victims in their own words, and that those recorded sales calls turned out to be a key piece of evidence early on that allowed us to get some of the early defendants to cooperate.

[00:11:50] Julie: Wow, that must have been a huge help.

[00:11:52] Adam Latham: When you hear your own voice defrauding a consumer it's really hard to come up with a good defense, so the fact that we got these recordings of actual sales agents on the phones was really key to moving the case forward rather quickly.

[00:12:07] Sir, I would never lie on the phone. It's something that I would have a trouble, I have a little bit of trouble sleeping at night and uh I don't think this is what God would want me to do for a living is just lie to people all day. I don't think God wants me to do that. (chuckle)

[00:12:22] Julie: Did you hear anything on those tapes that you didn't expect? Did any of the victims question what Client Care Experts was telling them?

[00:12:29] Adam Latham: Yes, one of the victim calls that we listened to, she was told that it would cost $250 and then it might cost another $400 for software, and she said, basically, "You're crazy. My computer didn't cost this much." The price of computers is coming down so much now that you can get a low end computer for several hundred dollars, so yeah, it really was out of hand what they were charging victims to get their problem taken care of.

[00:12:55] Julie: Got it. Got it. Well, Adam, thank you so much for your time today, and thank you for all the work that you do and keeping the bad guys off the streets for us.

[00:13:02] Adam Latham: All right, thanks Julie, I appreciate it.

(MUSIC SEGUE)

[00:13:06] Julie: Nearly 11 months after the raid, the United States Attorney for the Southern District of Illinois announced that they were filing federal fraud charges against seven Florida men for participating in an international tech support scam. Assistant Attorney Nathan Stump helped prosecute the case.

[00:13:23] Nathan Stump: The way, personally, I got involved is that the attorneys in my office that had already started working on this case, brought me in and said, "Hey, we've got more than we can handle. Can you take some of these cases for us and start working on it?" In the Southern District of Illinois where I work, as well as the Eastern District of Missouri, which is where St. Louis City is, those two districts had 330 victims and around $90,000 in losses.

[00:13:46] Julie: Nathan, what made this scam different from other scams that you've seen in your career?

[00:13:49] Nathan Stump: It's an interesting question. I guess I'm surprised at this level of sophistication. This tech support fraud is very sophisticated and very involved. On the one hand you've got the publishers; those are the people that create the pop-up ads, then you have the advertisers who get the ads to show up on your computer, there are lead brokers who can rout the calls to your call center. You have the sellers, that's the people that run the call center, they actually pitch you the products and services over the phone, and then you've got the payment processors who handle the credit card transactions and make sure that money actually changes hands.

[00:14:26] Julie: Wow, that is a lot of moving parts. And in this case, Client Care Experts even had an offshore office, correct?

[00:14:33] Adam Latham: Yeah, Client Care Experts actually had a Costa Rican operation as well, called ABC Repair Tech. They had another completely separate call center to handle traffic, and they could actually speak Spanish as well to handle Spanish-speaking victims. So it was really just sort of amazing to me how sophisticated and well-organized this fraud scam was.

[00:14:56] Julie: So who are the masterminds behind this whole thing?

[00:14:58] Adam Latham: The folks that we had set for trial were Michael Seward, he was the CEO of the company and the guy who founded it initially; Kevin McCormick, who was the Chief Financial Officer and a Co-Owner of the company; and then Grant Wasik. Mr. Wasik was the Vice President of Operations, kind of the guy really in charge of all the day-to-day inner workings of the company right before it was shut down.

[00:15:24] Julie: And this case didn't go to trial, correct?

[00:15:27] Adam Latham: That's right. It did not go to trial. It really did appear like that's where it was going, but at the last minute sort of the dominoes all fell in the right way and they decided to just plead guilty.

[00:15:37] Julie: And with confessional tapes like these, they sure sound guilty.

[00:15:41] Were some of these people that you were selling this product to, were they elderly people?

[00:15:44] Yes.

[00:15:45] How could you tell?

[00:15:47] Their voices, on the phone, um, it was just very obvious.

[00:15:52] Okay. Um, a lot of times the people that you and your colleagues were commenting were, "I can't believe that they would buy this," or that "they're stupid," those were elderly people?

[00:16:02] Right, and those were the ones that you pretty much took advantage of. You know, 'cause they're elderly people, by themselves, at their homes, you know with maybe their husband or wife, whatever, and, you know, they really had no idea about computers, so you would, people would get excited when they would hear an elderly voice on the phone, because there was a good chance that you were going to make the sale.

[00:16:28] Would you have sold this to your own grandma?

[00:16:30] Absolutely not.

[00:16:31] Why not?

[00:16:32] Because it's completely wrong. And it makes me sick to my stomach about it.

[00:16:39] Julie: And what about the sales managers and other key players?

[00:16:41] Adam Latham: One of the things that we recognized early on is that these telemarketing scams couldn't be successful without the sales representatives. Now those are the people who were actually lying and misleading consumers over the phone. And that's wire fraud. So in addition to going after the people who ran Client Care Experts, we've also prosecuted a number of the sales agents and the lower level managers as well. I think so far to date we've charged and convicted about 15 of those folks, and our investigation and all the work we're doing is ongoing.

[00:17:13] Julie: Even if you're at this, you know, sales rep level, you're working for a company and you knowingly are working for a company that's operating a scam, you will pay for it, right?

[00:17:21] Adam Latham: Right, I mean that's the hope anyway, right. Before I came up to Illinois I used to live in Alabama, and in Alabama they have something called fire ants, which I hadn't experienced anywhere else. And you have your backyard, you'll have all of a sudden, a little mound that appears; it's all full of fire ants. What I didn't realize when I first lived down there, is if you step on the mound to kill the ants, they all just run away and make five new mounds. And I think what happens with these telemarketing operations is if you just take out the leaders and you don't take out the sales representatives as well, they just scatter and start new companies, and you've got an even bigger problem than when you started. So we have been making a concerted effort in our district to prosecute, not just the people who own the companies, but also just some of the lower level folks that are the ones on the phones.

(MUSIC SEGUE)

[00:18:16] Julie: We've talked about how important it is to be skeptical when you're pressured to pay for something unexpected. But Frank, what do you do if you get one of these scary pop-up messages on your computer? Do you have any suggestions for our listeners?

[00:18:29] Frank Abagnale: Well the main thing you should do is if you get one of these pop-ups on your screen, is to realize that even if it says, "Don't turn off your computer, you may lose your data," they're lying to you, because they want you to call in and spend money. Just simply reboot your computer, shut it off, start it up again, and that should clear up any problem, and the big thing to just remember is very simple, that any pop-up that's supposedly from Apple, Microsoft, a tech support company that's asking you to send them money to fix a problem you don't really know you have, just this pop-up's telling you you have a problem, and keep in mind, they can make the screen flicker, and they can do little things on your screen to make like you have an issue, don't send anybody any money, because again, you don't know who that is. They have no idea who that is that's asking you for money, and sometimes they're just trying to get a credit card number from you, so they will make it a low amount. They may say, "Well, for $35 we can do it," because they're really wanting to get the credit card number and the information for the credit card so they can go charge many other things.

[00:19:30] Julie: And don't give remote access to anyone.

[00:19:32] Frank Abagnale: Absolutely not, because that's really bad, because then I could steal all your financial records, all your old photographs and pictures, and then say, hey, if you want it back you have to pay me this amount of money. And sometimes you get it back, sometimes you pay the money and they never send it back. In most cases, it's very simple to just restart your computer and clear out the problem. But whatever you do, don't be sending anybody any money that tells you they can fix the problem online, because that's just a scam.

[00:19:59] Julie: Yikes. All right, well, Frank, thank you once again.

[00:20:04] Frank Abagnale: Thank you, Julie.

(MUSIC SEGUE)

[00:20:06] Julie: 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 the show's Associate Producer, Brook Ellis, and Audio Engineer, Julio Gonzalez. Be sure to find us on Apple Podcasts or wherever you listen to podcasts. For The Perfect Scam, I'm Julie Getz.

(MUSIC OUTRO)

END OF TRANSCRIPT

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