After a year of reports about Asians in Australia and the US experiencing the ‘China embassy scam’, the FBI’s Internet Crime Complaint Center (IC3) has posted a warning about the fraud.
According to IC3, victims of the scam have lost a total of over $40 million between December 2017 and February 2019 covering just 350 complaints from 27 states in the US, with 35 percent of victims coming from California and New York. The average loss was over US$164,000,
The scammers are targeting Chinese people in Australia who are on student or working visas, peddling allegations that the recipient has outstayed their visa, had their identity stolen, or committed a crime.
The Sydney Morning Herald reported in May that one victim in NSW had lost $1.9 million to the Chinese embassy scammers, who have resorted to asking victims to stage a kidnapping if they can’t pay up, according to NSW Police financial fraud investigators.
IC3 details a sophisticated phone and email fraud campaign that involves duping victims into believing a mail package from China has been intercepted and that they are under investigation by Chinese authorities.
“In some variations of this scam, victims may be first told that a suspicious document, package, or person was found or detained, usually at an airport located in China,” IC3 said.
“The person on the phone claims the victim's passport, social security card, or credit card was found to be in the package or on the suspicious person. Victims are then told they are under investigation and, in order to assist Chinese law enforcement, they must speak to an investigator.”
Other scams involve fraudsters posing as employees of Chinese credit card companies on the hunt for overdue balances.
“Victims are instructed they must work with Chinese law enforcement to address the outstanding payment,” IC3 warned.
New York University issued an alert in August about scammers posing as Chinese consulate officials who were asking students and academics to supply credit card information to avoid troubles with Chinese law enforcement.
The New York Chinese consulate also posted a warning on its website that it would not ask for bank account information, personal information, nor would it deliver a parcel pick-up notice or ask people to answer inquiries from a Chinese police department by way of phone calls.
One Chinese-American resident of San Francisco reportedly lost $2.86 million through 11 wire transfers to scammers masquerading as employees of the Chinese Embassy.
The targets are handed off to supposed investigators who instruct the victim to send funds to accounts “almost exclusively” in China or Hong Kong or face jail time, according to IC3. Victims are also told to get a loan if they can’t pay up immediately.
The IC3 posted its warning after a spike in complaints between December 2018 and January 2019, following a peak in May to June 2018 when it received 75 complaints. Victim losses in the US totaled $9 million in May 2018.
Victims are often asked not to discuss the fraudulent approaches with friends and family. IC3 notes that criminals ramp up the threat by contacting family members of a target to and claim their relative was kidnapped and demand a ransom.
It seems victims of the scam are past victims of data breaches that happened at organizations based in the US or China.
“Criminal actors may lend legitimacy to the scam by providing copies of documents with victims' pictures, passport numbers, social security cards, or financial data. They may also encourage victims to verify Chinese law enforcement phone numbers via the internet before they speak to investigators,” IC3 noted.