Pictured above: Federal Trade Commission Regional Director Thomas Dahdouh was interviewed by reporters at a New America Media briefing earlier this year. Dahdouh told India-West in response to a recent "government grants" scam that the calls are being made from telemarketing boiler rooms in India. Photo by Odette Keeley / New America Media.
SAN FRANCISCO – In the latest take on a scheme that has been going on for more than 30 years, scammers from India posing as officials from the U.S. Government Grants Department are offering grants to U.S. residents of $9,000 or more, once the recipient has purchased an Apple I-Tunes gift card and given the code to the caller.
Thomas Dahdouh, San Francisco-based regional director of the Federal Trade Commission, confirmed to India-West that such calls are a scam originating in India. “There is a continual issue of imposter scams originating in India,” he said, noting that the agents were calling from telemarketing boiler rooms in the country.
The FTC has been working with the State Department and Indian authorities to curb the prevalence of the fraud, said Dahdouh, noting that several cases have been prosecuted when the payment processor is based in the U.S.
India-West became aware of this scheme when a caller, posing as a representative of the Grants Department, called a staff member’s cell phone number and offered her a “no strings attached” grant of $9,000. “The government is giving you this money because you have a good record, no criminal record, no bankruptcies and you have filed your taxes,” said the agent, who identified himself as Mark Smith, despite having a heavy Indian accent.
“This is a once in a lifetime opportunity,” said Smith, adding: “Don’t ever think this is a fraud. It is 100 percent guaranteed.”
The call came in from a Washington, D.C.-based area code: (202) 642-1029. Chillingly, Smith correctly identified the staff member’s social security number and asked her to confirm it.
The agent then asked the staff member to purchase an I-Tunes gift card with a value of $250, and then to call him afterwards and give him the 16-digit code. Then, the money would be available – in cash – at a nearby Walmart or Western Union within 25 minutes, Smith said, adding that the $250 gift card cost – which he called a “registration fee” – would also be refunded at that point.
When the staff member did not purchase the card and did not call back, the agent repeatedly called 11 times in 24 hours to ask why. When expressing doubts about a scam, the agent first gave a Washington, D.C. address: 200 Independence Ave., SW Washington, D.C. 20201. Googling the address turned up the headquarters of the U.S. Department of Health and Human Services.
The Better Business Bureau has issued a statement noting that scammers posing as the “Federal Bureau of Grants Department” have used this address to lend authenticity to their fraudulent scheme.
“Consumers report being approached with information that they have been awarded a grant. The address location used by the promoter is that of a genuine federal agency, but this promotion and its contacts are misrepresenting themselves as having an affiliation with the US Government and are not located at the Independence Avenue address in Washington, DC,” noted the BBB, adding that many consumers have been approached to give out their bank account information for awarding of the grant, often resulting in losses of thousands of dollars.
“A genuine grant would provide notice that can be verified and would not be asking recipients for payments,” noted the BBB.
On the ninth call, Smith directed the India-West staff member to www.obama.net, which details various grants the government purportedly offers. “See, we are legitimate,” he stated.
Dahdouh told India-West that agents resell the I-Tunes cards. Consumers often link their I-Tunes cards to their bank accounts; fraudsters gaining bank information can create greater monetary damage, he noted.
“Any time someone is trying to get money involved in such a transaction – credit card, debit card, money order – it is likely suspicious,” he stated, adding: “You never need to pay anyone to get a government grant.”
Dahdouh advised consumers who have been defrauded by this scheme to contact the retailer and Apple, which may provide a refund if the card has not yet been processed.
Agents can now obtain entire social security numbers in a variety of ways, added Dahdouh. “One way is if a hacker got your personal financial information somehow. Another way is if you applied online for something thinking something was legitimate but it was not,” he said, encouraging consumers to check free credit reports if they believe their information has been compromised.
Apple issued a policy statement to retailers Sept. 21, noting it was limiting the maximum amount of an I-Tunes card to $500. The company has also created signage for retailers, stating: “For use on iTunes and App Store only. Not valid for other payments;” and “Do not share with anyone you do not know.” It had advised stores selling the product to train its employees to spot potential victims of fraud.
More information about the government grants scam and similar fraudulent activity is available at ftc.gov.