These scammers called almost everyone in Canada — and swindled millions

Supported By:

Net Patrol International Inc.  Data Investigation and Forensic Services
Bankruptcy and Insolvency Trustees

The arrest of an accused fraudster returning to Canada from China and a deportation order against another to send him back to India shed new light on a mass victimization scam that swindled millions of dollars from Canadians.

The telemarking scam was so voracious and efficient that almost every phone number in Canada was dialled, and most Canadian residents received a call trying to cheat them — even police officers who were actively investigating the fraudsters, according to recent RCMP testimony.

Four years after the RCMP announced charges for the massive fraud, Thomas Pao, who was deemed a fugitive, was arrested at Toronto’s Pearson airport in April as he stepped off a plane from China. The arrest came shortly after Abilash Kumar Chenreddy, accused of being a money mule for the scammers, was ordered deported from Canada.

The RCMP’s fraud investigation, codenamed Project Octavia, began in 2018 after years of complaints of widespread victimization by a phone fraud, known as “the CRA scam,” because callers often claimed they were from the Canada Revenue Agency. Other variations saw scammers pretend to be bank officials, police officers or tech-support workers.

Testimony at a hearing before the Immigration and Refugee Board of Canada (IRB) for Chenreddy shed new light on the “highly organized and sophisticated” fraud.

RCMP Staff Sgt. Ken Derakhshan, case manager for Project Octavia, described how the fraud worked.

“The call comes in, and the caller in the call centre from India aggressively tells the victim that he or she … owes a large amount of taxes to the CRA.

“Depending on the caller, some use trickery and deceptive language, and some use extreme levels of threats. … So, ultimately the victim ends up going to the bank, taking out large amounts of cash,” he said.

Derakhshan said amounts lost to the scammers averaged between $8,000 to $20,000, with some climbing to more than $100,000. Total value from all victims isn’t known, as fraud often goes unreported, but police said at least $34 million in losses were tracked.

The phone banks in and around New Delhi were managed by call-centre operators who ran them like a legitimate business, including time sheets and payroll. Callers were given scripts to use should they connect with a potential victim, Derakhshan told the IRB.

Victims were pressured and tricked to withdraw money from their banks and use it to buy gift cards for the scammers, or to send it through traditional money transfers. The scam also shifted to ordering victims to send money through Bitcoin automated tellers. Under police pressure, they switched to just sending cash, Derakhshan said.

“The victim would be threatened to place their money into an envelope and given a very elaborate set of instructions to use express mail such as Purolator or UPS to ship that money to an address within Canada.” Police designated those receiving the cash as the group’s “money mules.”

The cash was often mailed to a mule’s home or business address, or a postal box, addressed to a fake name.

The mules took the cash, got a small portion as their cut, and passed the rest on to “handlers,” who were low-level managers pooling payments and moving the money through different accounts or transferring it to India using hawala, an informal, underground money-transfer system.

Above the handlers in the organization were managers, and at the top of the pyramid were the masterminds in India, Derakhshan said.

“The commission of this sophisticated crime requires a large number of persons in various roles. These persons collaborate within their respective roles in order to carry out their criminal mandate,” Derakhshan told the IRB.

He said hundreds of people were arrested in India during call-centre raids as Canadian and Indian authorities cooperated in the investigation.

In 2020, there were a handful of arrests and arrest warrants in Canada for suspects in the scam, but several of the accused were overseas and beyond the reach of the RCMP.

Pao, formerly of Mississauga, could not be found when he was added to the RCMP’s list. For years he apparently lived in China. While away, his Canadian passport expired.

For whatever reason, Pao needed to return to Canada and applied for an emergency travel document. That tipped off the RCMP to his pending return. He was taken into custody at the airport immediately after deplaning on April 26, the RCMP said. He is charged with fraud over $5,000, possession of proceeds to crime, and money laundering. His case remains before the courts.

Meanwhile, another man accused in the scam faced a different kind of hearing.

Chenreddy, 30, a citizen of India who came to Canada on a student permit in 2017, was not charged criminally in the case, but Ottawa moved to deport him as a foreign national inadmissible for being a member of an organized crime group.

Chenreddy is one of about 20 Indian nationals accused of being money mules for the fraudsters who were not charged by the RCMP but instead reported to Canada Border Services Agency for immigration investigation, the National Post has learned. All of them were students at various post-secondary institutions in Canada.

When Chenreddy failed to show up at an immigration review in 2021, an arrest warrant was issued, according to immigration documents. He had left Canada but returned, on Feb. 27, 2022, on a flight from India, when he was arrested at Toronto airport for the immigration complaint.

He had an immigration hearing in 2023 and said he was misled by the scammers and believed he was hired for a legitimate job.

Chenreddy’s address in Mississauga was reported as the destination for money sent by some scam victims, the IRB heard. When police first talked to him about it, he lied, saying he didn’t know anything about the packages, and he then deleted WhatsApp messages about the deliveries after police left, the IRB was told.

“I was terrified when police asked me about it,” Chenreddy told the IRB.

He later admitted to his role and told police he applied for an online job posting and was hired through WhatsApp messages. He was paid $200 to $300 for each package he received and forwarded to another mule. He said three packages arrived before police came to ask him about it.

Chenreddy was ordered deported by the IRB on April 11. It is not known if he has been removed because neither the Canada Border Services Agency, the RCMP, nor his lawyer would say what his status is.

Aminder Kaur Mangat, Chenreddy’s lawyer, said the IRB’s decision is “flawed” and “unreasonable.”

“Despite Mr. Chenreddy’s significant contributions to Canadian society as a high-skilled worker, the (Immigration) Act allowed for his removal without requiring a criminal charge or conviction. This situation underscores a fundamental problem with the legislation, which can lead to the exclusion of valuable individuals from Canada,” she told the National Post.

She called for the act to be reformed.

The RCMP declined to discuss the developments, saying “this file is still before the courts.”

This article was originally sourced from www.NationalPost.com