DA GASCÓN HOLDS A PUBLIC EDUCATION AND PREVENTION EVENT ON THE LATEST SCAM TARGETING THE CHINESE COMMUNITY

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News from the Office of District Attorney George Gascón

 

FOR IMMEDIATE RELEASE

June 25, 2018

Twitter: @GeorgeGascon

CONTACT:     ALEX BASTIAN (415) 553-1931             |     NIKESH PATEL (415) 734-3205

 

 

DA GASCÓN HOLDS A PUBLIC EDUCATION AND PREVENTION EVENT ON THE LATEST SCAM TARGETING THE CHINESE COMMUNITY

 

 

SAN FRANCISCO – Today, in light of a new telephone scam to hit San Francisco, District Attorney George Gascón, the San Francisco Police Department, and the San Francisco Consulate General of the People's Republic of China held a public awareness and prevention event in Chinatown to share information about the Chinese Embassy Phone Scam. The event was designed to educate members of the community about the latest in a series of transnational organized crime scams affecting Bay Area residents and people across the country.

 

 

“The Chinese Embassy Phone Scam is a complex scheme designed to scare people into turning over their money,” said District Attorney George Gascón. “Once someone sends their money to scammers overseas, it becomes incredibly hard to recover. Preventing the scam before it occurs is our best tool to combat these ploys.”

 

The Chinese Embassy Phone Scam is designed to play on people’s fear. At its crux, scammers scare their targets into believing that they have played a role in committing financial fraud. To avoid arrest and clear their name, victims are convinced that they must send their money overseas by wire to be “cleaned.” Once wired, the money is immediately withdrawn, making it almost impossible to recover. In one case, a San Francisco resident lost $2.86 million over the course of 11 wire transfers to accounts controlled by the scammers.  A New York resident lost $2 million to the scam in December of 2017.  For more details about the typical scam, please see the section below titled, “Typical Scenario”.

 

Once victims have wired their money, it is extremely difficult to recover. Precautions, however, can be taken to avoid the scam altogether. For example, the Embassy and Consulates General of China do not ask for personal or financial information, so people should not give callers personal information, such as their date of birth or their relatives’ names. Additionally, they do not deliver parcel pick-up notices or open parcels, or ask people to answer police inquiries by phone.

 

“Just hang up,” said Jason Collom, Senior Inspector of the Special Prosecution Unit at SFDA. “If you don’t know them, don’t talk to them, especially in this day and age.”

 

If someone has already fallen victim to this scam, it is imperative that they act immediately to recover any money. First, the victim must contact their U.S. bank to “recall the wire”. They should then file an online crime report with the Hong Kong Police Force to freeze the perpetrator’s account.

 

Next, the victim should file a crime report online with the FBI, and report to their local police agency and have the agency forward a copy of the case to the FBI. They should also file a report with the Federal Trade Commission. San Francisco residents are additionally encouraged to call our office’s fraud hotline at (415) 551-9595.

 

This type of telephone scam is only the latest in a series of transnational organized crime impacting the Chinese American community in recent years; others include the Gold Scam, also known as the Buried Treasure Scam, and the Blessing Scam. A local resident, Julia Ma, avoided the Gold Scam by referencing materials found on the SFDA website. She then alerted our office to the attempted scam, and has since been helpful in working with our office to raise awareness about the scam.

 

The SFDA Special Prosecutions Unit will continue to work with the Hong Kong Police Force, the New York Police Department and other domestic and international law enforcement and prosecution partners to combat these types of cases. Our office will continue to release public education materials and urges the public to exercise caution and report instances of scam.

 

Typical Scenario

 

The scam is long and complex. In a typical scenario, a victim receives a telephone call with an automated message in Mandarin. The call may appear to originate from the Chinese Consulate in the area or the Chinese Consulate in Washington, D.C.  The automated message advises the victim that there is a Chinese government official who needs the victim’s immediate attention. The victim is then directed to press a number, which connects the unsuspecting victim to “Scammer 1,” the first of multiple scammers.

 

Scammer 1 identifies him/herself as a Consulate/Embassy employee, and advises the victim that there is a parcel from the Chinese Ministry of Public Security that may potentially be for the victim. Scammer 1 then asks the victim for personally identifying information, including the victim’s full name, date of birth, address, where in China he and/or his family are from, citizenship status, etc before confirming that the parcel is indeed addressed to the victim. Scammer 1 then generously offers to open the parcel for the victim.

 

Scammer 1 then opens the package and informs the victim that he and/or his family members are involved in a major fraud investigation in mainland China and that there are warrants for their arrest. Scammer 1 continues to ask additional personal questions to “confirm” that the victim is actually the subject of the investigation before referring the victim to the “detective” (Scammer 2) assigned to the case. To legitimize the appearance of the investigation, Scammer 1 may even offer to look up the detective online with the victim. The scammer will direct the victim to online information about a high-ranking official with a reputable police force in mainland China, and then offer to connect the victim to the investigator via three-way call.

 

Once on the call, the detective, Scammer 2, confirms that the victim is the subject of an investigation in which the victim and/or their family has committed a slew of major fraud crimes against Chinese citizens. The victim is told that there are outstanding arrest warrants for the victim and/or their family members and the possibility of a lengthy prison term.

 

At this point, Scammer 1 may suggest that the victim pay monetary bail to Scammer 2, or Scammer 2 may “order” the victim to liquidate all of his assets and wire cash to several accounts in Hong Kong where investigators from the Hong Kong Independent Commission Against Corruption (ICAC) will be “examining” the money’s trail prior to returning it to the victim.

 

The three parties will then negotiate the amount, sometimes over several phone calls, many text messages, and a few hours or even days. Scammer 2 will provide the victim with instructions for wiring the money.  If the victim has money in mainland China, then the money may be wired to accounts there.  If the victim’s money is in the U.S., then the money will likely be wired to bank accounts in Hong Kong. After the victim issues the wire(s) and the cash deposits into the initial receiving accounts in Hong Kong, the money is immediately withdrawn or laundered.

 

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