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They’re finding dead bodies outside scam call centers; it’s time to sound the alarm on fraud — bobsullivan.net | #cybercrime | #infosec


“The cartel just very quickly, easily, and efficiently made an example of them by leaving their body parts in 48 bags outside of the city….They’re good at making high profile, gruesome examples of those who would defy them.”

I’ve spent many years writing about Internet crime, so I don’t spook easily.  After working on this week’s podcast, I’m spooked.

For the last year or two, I’ve had a gathering sense of doom about the computer crime landscape. I hear about scams constantly, but something has seemed different lately. The dollar figures seem higher, the criminals more relentless, the cover stories far more sophisticated. Thanks to fresh reporting and statistics, I am now fairly certain I’m not being paranoid. Increasingly, Internet scams are being run by organized crime organizations that combine the dark side of street gangs with Fortune 500 sales tactics.   I will share numbers in a moment, but stories are always needed to make a point this important, and that’s why we bring you “James’ ” harrowing tale this week.  He wanted to sell an old, useless timeshare, but instead had $900,000 stolen from him — by the New Generation Jalisco Cartel in Mexico. That same group was blamed for murdering call center workers and spreading their body parts around Jalisco.

 This episode offers a rare chance to hear a scam in action. James recorded some of his calls with criminals and shared them with us.  ‘Show me, don’t tell me’ is the oldest advice in storytelling, and that’s why I really hope you’ll listen.  As you hear criminals who go by the names “Michael” and “Jesus” badger and manipulate James, your skin will crawl, as mine did. But I hope it will also place a memory deep in your limbic brain, so when you inevitably find yourself on the phone with such a criminal one day, an autonomic defensive reaction will kick in.

For this episode, I also spoke with a remarkable journalist named Steve Fisher. An American from rural Pennslyvania, he worked in farms as a youth, learned a lot about the plight of migrant workers, and that led him to take a post as an investigative journalist in Mexico City covering crime gangs.  Fisher recently wrote about a victim like James who thought he was unloading an unwanted timeshare, but instead had $1.8 million stolen during a decade of interactions with the cartel. In that victim’s case, about 150 different cartel “workers” interacted with him. I can’t begin to stress how vast this conspiracy is — how detailed the cartel’s record-keeping must be — in order to carry on this kind of ongoing crime. As we point out in the story, timeshare scams have become so profitable that this dangerous Mexican cartel is trading in drug running operations for call centers.  The gruesome methods of control remain, however.

This model is replicated around the world.  From India, there are tech support scams. From Jamaica, we get sweepstakes fraud. From Southeast Asia, cryptocurrency scams.  From Africa, romance scams.

(Of course, there are scams operated in the U.S., too, but those criminals don’t enjoy the natural protection that international boundaries and jurisdictional challenges provide).

I know most of us imagine scam criminals sitting in dark, smoke-filled boiler rooms placing 100s of calls every day desperately hunting for single victims.  That’s not how it works any more. Scam call center “employees” work in cubicles  (though in some cases, they are victims of human trafficking).  They have fine-tuned software; they work from lead lists; they have well-researched sales scripts; they have formalized training. And they succeed, very often.

The numbers bear this out. Theft through fraud has surged over the last five years, with losses jumping from $2.4 billion in 2019 to more than $10 billion in 2023. Of course, many scam losses are never reported, so the real number could easily be four or five times that.

But I trust my own ears, and you should too.  Recently, I have heard a pile of stories from victims in my larger social circle.  Plenty of near misses — friends who tell me they got a call from a “sheriff” about an arrest summons that was so believable they were driving to a bitcoin ATM before something triggered skepticism.  Unfortunately, I hear plenty of heartbreaking stories too, of people who bought gift cards or sent crypto before that skepticism kicked in.

I want you to listen for these stories in your life. Look for them in your social feeds, ask for them at family parties. I bet you leave this exercise just as concerned as I am. Scams have become big businesses, operated by large, sophisticated crime gangs all over the world. It’s time to talk with your friends and family about this.

We can’t educate our way out of this problem.  There’s a lot more than U.S. financial institutions, regulators, and law enforcement can do to slow the massive growth of fraud.  But at the moment, you are the best defense for yourself and the people you love.

To that end, I would like to suggest you listen to this week’s episode and share it with people you care about. I can tell you that scams are up, and that criminals are so persuasive anyone can be vulnerable. But there is nothing like hearing it for yourself.

Be careful out there.

You can listen to part 1 of our series by clicking the play button below, or by clicking here. A partial transcript appears below that if podcasts aren’t your thing.

 

You can learn more about this story by reading this remarkable New York Times story. James was interviewed for this piece, too.

———————Partial transcript——————

Here’s what Steve learns as he is reporting on his story. We often imagine scam criminals sitting in dark, smoke-filled basement room, working by themselves or in small groups, desperately scrambling to steal a few dollars here and there. Well, timeshare scams kind of used to work like that. Until….

[00:29:50] Steve Fisher: And then in 2010, something very important happened. An individual who had very close ties to the Jalisco Cartel, the new generation Jalisco Cartel, one of those violent cartels in Mexico, if not in the world, said, this individual who knew the cartel said, “Look, there’s this incredible business where you can make extraordinary amounts of money with very little overhead. And it’s this scam. And there’s a number of call centers in Puerto Vallarta that you can take over.” And uh, and he’s like, “And I’ll teach you how to do this.” And so this violent cartel basically took over call centers either forcing people to work for them or threatening them uh until they uh, you know, agreed to work with them. Of course, like I said, forcing them to work with them, and, and the Jalisco cartel took over this business in Puerto Vallarta in 2010 and began to perfect it to a level uh, of incredible sophistication. And so, according to the US Government, they’re now making hundreds of millions of dollars but all, it all started them taking over little mom-and-pop call centers back in 2010.

[00:31:05] Bob: So is, is this what I imagine in my head? There’s a small boiler room and gang members just bust in one day with uh, obvious weapons on them and say, you’re working for us now. Is that how it works?

[00:31:15] Steve Fisher: Yeah, I can’t speak particularly to the boiler room part, but that’s what it was. It was just people, mom-and-pop sort of businesses, um, doing their own thing, you know, and uh like I said, fugitives of the law and, and ex-pats, um, scamming senior citizens on their own. And what the Jalisco cartel did was just take it, uh, formalize it all, and create enormous streams of income for the cartel.

[00:31:44] Bob: So Steve doesn’t know James, but he’s interviewed other victims, and he knows the scam very well. People like Jesus and Michael and Bruce, they aren’t representing a timeshare buyer, they don’t work for a financial company, they work for what’s known as the Jalisco New Generation Cartel, and stealing money from American timeshare owners is big business for the violent gang. Such big business that the cartel has dramatically shifted business models in recent years.

[00:32:16] Steve Fisher: Well the return on investment, Bob, is, is actually according to US Government officials, better than drug trafficking because if you think about it, you know let’s say the Jalisco cartel is getting a shipment of cocaine from Columbia and needs to get it all the way into the United States. The amount of investment along that route to bribe officials, basically just defend that shipment from its origins to the United States is an extraordinary amount of, of investment. It requires a lot of logistics, a lot of people to get that shipment to its destination.

[00:32:53] Bob: So instead of working with street dealers and bribery and secret shipping arrangements, the cartel hires office workers who fill up call centers that target US timeshare owners looking to unload their vacation homes.

[00:33:09] Steve Fisher: When you’re talking about these call center scam centers, you have a few people that make some phone calls convince people to give their money, you know, to the cartel which of course they don’t mention that it’s a cartel, I mean, you, it’s basically creating a few front companies, shell companies, LLCs, if you will. And that’s pretty much the extent of their investment. They pay, uh US Government officials told me that they pay, you know, low level call center employees about $700 a month, and then the top tier closing group, as they call them, you know they get a percentage of the cut of the, of the scam that they um, that they, they’re a part of. So the investment is far less than getting a kilo of cocaine into the United States and the risk is infinitely lower.

[00:34:03] Bob: The men James has been talking to work in a very dangerous business.

[00:34:09] Steve Fisher: So if anyone uh cared to uh go up against the Jalisco cartel, you know, they, they would quickly come up against semiautomatic weapons, 50-caliber machine guns and, and perhaps think twice about confronting them.

[00:34:23] Bob: And, and in fact there were uh several bodies found outside a call center not very long ago, right?

[00:34:27] Steve Fisher: Yeah, that’s right. And officials aren’t totally certain what happened or why, but it’s their, some theories are that these call center employees perhaps were staging a revolt, trying to leave their jobs, and the cartel and just very quickly, easily, and efficiently made an example of them by leaving their body parts in 48 bags outside of the city. You know, again, it’s always difficult to determine what happens in a, crimes are difficult, it’s hard to get to the bottom of a, of a crime in Mexico, and certainly with this one that is the case. But the theories kind of align with how the Jalisco cartel functions in general. They’re good at making high profile, gruesome examples of those who would defy them.

 





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