Taiwan-based telephone fraud groups spreading overseas

Asia: Taiwan-based telephone fraud groups spreading overseas

10/18/2007

BY YOSHIHIRO MAKINOTHE ASAHI SHIMBUN

SEOUL--The automated voice on the other end of the line in May informed the man that there was a query about his account at a leading South Korean bank.

"As for your credit card that we issued, you have been in arrears with the repayment of 2 million won (about 250,000 yen). If you need more information, please press the No. 9 button," the voice said.

After the man pushed the button, the line connected to a man who called himself a "clerk in charge of delayed repayment" in broken Korean.

The man, who is in his 30s, protested, saying, "I don't know anything about any delayed repayment." Then, the "clerk" apologized and said the bank was at fault.

After that, the clerk said, "We would like to protect your bank account. Please go to an automated teller machine (ATM) nearby. There, we will explain to you (through a mobile phone) how to operate the machine (in order to protect the account)."

The man did not go to an ATM because he thought the call was fishy.

When the man told a colleague about the call the next morning, the person laughed and said, "They called you, too? Which bank's name did they use this time?"

What would have happened if the man had followed the instructions and gone to an ATM?

He would have been asked via his cellphone to transfer his money to a safe account. The "safe account," however, is actually one opened under a fictitious name. Once such transfers are confirmed, the gang members operating the scam rush to a different ATM and withdraw the money.

Since last fall, the scam known as "voice phishing" has spread rapidly in South Korea. About 4,200 such cases were reported between June 2006 and July this year, according to the National Police Agency (NPA) of South Korea. The financial damage of those cases totaled about 40 billion won (about 5 billion yen).

In May this year, a judge was cheated out of 60 million won (about 7.5 million yen).

The methods used in the scams are surprisingly varied.

In some cases, culprits call to say, "Someone is shopping with your card." In other cases, they say, "This is the police. We need to take security measures for the protection of your card."

In the case of the judge, a man who pretended to be his son called and asked for help.

Another feature of the telephone scam is that crime rings are often led by non-South Koreans. Sixty percent of those arrested are Chinese or Taiwanese.

For this reason, the NPA has invited Taiwanese police officers in charge of telephone scams to South Korea to jointly study the transnational crimes and exchange information on suspects at large.

As a result of strengthened investigations, South Korean police arrested about 1,000 people in June and July. In addition, the number of telephone fraud cases in July decreased sharply to 138, which was about 20 percent of the record-high 699 cases in January.

Taiwan has apparently become a stronghold of telephone fraud cases that have spread in some Asian countries.

Late last year, Taiwanese police arrested two men, aged 29 and 35, in connection with telephone fraud cases. At that time, police officers were surprised to see that the suspects had been committing crimes in Asian countries by subtly using high-tech tools from Taiwan.

The two, who were members of a group based in Taichung city in central Taiwan, allegedly defrauded TW$100 million (about 370 million yen) from hundreds of people living mainly in China, South Korea and Thailand.

According to the police, the two men bought several mobile phones overseas in order to make it hard for Taiwanese police to track them. Then, using the mobile phones, other high-tech devices and discount Internet Protocol (IP) telephone lines, they built a system that enabled them to automatically make bulk calls or inundate computers with e-mail messages.

They also recorded fake messages in several languages with the help of collaborators in Taiwan, China, South Korea and Thailand. For instance, one of the messages said, "Your telephone fee has not been paid yet."

The two kept sending such messages around the clock from Taiwan to other areas. When someone replied, they asked the person to transfer money from an ATM or a post office to an account opened under a fictitious name. One of the accounts was named, "Finance management bureau's joint account."

According to the Criminal Investigation Bureau (CIB) of Taiwan, telephone scams started in Taiwan in the late 1990s and escalated into a serious social problem in 2000.

Also around the same year, some groups in Taiwan started to relocate their bases across the sea to Amoy in mainland China's Fujian province, and have since cheated people in and around the city in a similar manner in cooperation with local Chinese.

In recent years, such groups have made inroads into South Korea, Vietnam, Thailand and the Philippines, CIB officials said.

The structure of the crime organizations varies.

In some groups, a Taiwanese heads a ring and its members are mostly Chinese. In other cases, Chinese who know the scam set up their own groups.

In South Korea, the most common case is of Taiwanese leading the groups and Chinese who have come from China's Liaoning and Shandong provinces working as telephone clerks. Most of those Chinese belong to the minority Korean ethnic group and can speak the Korean language.

Zhang Wen Yuan, a high-ranking official of the CIB, said, "The basic business method (of those crime groups) is that they find people who are familiar with the language and situations of their target country. In Southeast Asia, they sometimes cooperate with local residents of Chinese ancestry."

The telephone frauds began to spread in Japan and Taiwan almost simultaneously. However, the connection between the groups in Japan and those in Taiwan is unknown.

"There is no information that indicates that the telephone scams have spread from Taiwan to Japan or from Japan to Taiwan," Zhang said.

Paying attention to the similarities of the crimes in both areas, however, the Taiwanese police are now collecting information on similar crimes being committed in Japan.

In the fraud cases, crime groups must withdraw money from victims through ATMs or other places. Because of the risk that those who withdraw the funds could be arrested by police, the crime groups use part-timers for that task.

The crime groups advertise in Taiwan for overseas part-time jobs. In many cases, the groups advertise good "labor conditions," such as "shouldering air tickets and hotel charges of part-timers."

Many of those who apply are unemployed.

According to the Foreign Ministry in Taipei, more than 100 Taiwanese citizens who were overseas as "money collectors" have been arrested so far in South Korea alone.

Criminal syndicates are also behind many of the telephone fraud groups. In several cases, local assembly members or company owners are offering money to the fraud groups so that they can buy mobile phones and pay telephone charges.

"The fraud groups are becoming more and more like companies and are spreading their activities internationally," a CIB official said.

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Tsuyoshi Nojima in Taipei contributed to this article.(IHT/Asahi: October 18,2007)