Law enforcement agents in Costa Rica have raided a half-dozen boiler rooms and detained seven people in the latest effort to disrupt massive telephone scams that have been swindling elderly Americans out of tens of millions of dollars, sources told ABC News.
The raids represented a new front in the effort to cripple the potent phone scams, which were initially organized by Americans and Canadians living in Costa Rica, but have since blossomed into what authorities believe is an extensive crime ring populated by both Westerners and Costa Rican citizens. Last October, ABC News reported on a scam exploiting the good name of the Make-A-Wish Foundation that has siphoned more than $20 million from unsuspecting Americans and tracked down two fugitives who had been hiding in Costa Rica.
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A series of raids conducted by American officials in the Costa Rican capital in 2006 led to the arrest and conviction of more than three dozen telephone scammers. One of the kingpins was resentenced in a Charlotte courtroom earlier this week to 30 years in prison. Initially, investigators thought those raids would put a stop to the phone calls, in which victims are persuaded by scammers pretending to be government agents to send luxury tax or other payments in exchange for a sweepstakes prize that never arrives.
Last fall, ABC News reported that, despite those raids and arrests, the volume of calls had increased, and the schemes originating from Costa Rica had grown in sophistication. Scammers were using voice-over-internet phone technology to persuade victims that they were calling from the Internal Revenue Service or the Federal Trade Commission in Washington, D.C. They then used cut-outs to forward wired payments from victims from locations in the U.S. to Western Union outlets in Costa Rica.
Scammers not only pretended to be collecting for the IRS, but also for such charitable organizations as the Make-a-Wish Foundation. Make-a-Wish had received scores of complaints from people who thought they were supporting the renowned charity, only to discover that the charity does not run a sweepstakes.
Federal officials told ABC News that tens of millions of dollars were involved, and that for criminals hiding behind tough extradition laws in Costa Rica, the crime had come to rival drug trafficking for its earning power. Several victims described losing six-figure sums. One elderly man in Florida was found to have sent more than $800,000 to the scammers before federal agents stopped him.
Yesterday's raids marked the first time Costa Rican authorities acted independently to crack down on the boiler room operations. A local newspaper, AM Costa Rica, reported that the action came at the urging of the U.S. Embassy. The newspaper said that "there has been an open secret for years that bilingual Costa Ricans with good accents could make a lot of money participating in such scams. At one point an estimated 200 Costa Ricans were employed in such jobs."