U.S. charges 19 in international fraud, money laundering scheme

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By Joel Schectman | WASHINGTON

WASHINGTON U.S. authorities on Wednesday charged
19 people with taking part in a complex international fraud and
money laundering ring that tricked companies and consumers out
of millions of dollars.

The charges were part of an international sweep Wednesday,
in which police in the United States, Hungary, Bulgaria and
Israel arrested 17 individuals accused of money laundering and
wire fraud, United States Attorney for the District of Columbia
Channing D. Phillips announced at a press conference.

Authorities from the U.S. Department of Treasury and the
Federal Bureau of Investigation say they uncovered the organized
crime groups in 2011 when they discovered a makeshift call
center operated out of a Washington hotel room.

The operation was used to post phony car ads online
advertising cars, luring customers with prices far below market
value. Once the customers placed a deposit for the cars, the
fraudsters would cut off contact and disappear with the money,
authorities said.

“Money mules” would then withdraw the cash and transport it
in bulk to a network of money launderers in Europe, authorities
said.

After investigating that scheme, authorities say they
learned members of the group, which spanned Europe, Israel and
the United States, had also scammed unnamed German and
Portuguese companies out of millions of dollars in phony
transactions in 2014 and 2015.

Using fake email addresses to impersonate the chief
executive or president of a company, authorities say the
defendants would instruct mid-level employees to wire hundreds
of thousands of dollars for a “secret” financial transaction,
such as a corporate acquisition.

But the bank accounts were controlled by the criminals, who
disappeared with the money, authorities said.

Reuters could not immediately reach the defendants for
comment.



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