DH Deciphers | 'FedEx' scam: What is it and why is it hard for police to bust it?

For several months now, Bengaluru police have been troubled by cybercrimes concerning 'FedEx' packages. Many victims have lost large sums of money — some even crores of rupees — to this ingenious scam, which came to the fore only this year. So how does this scam work, what are the tricks employed by the scamsters, and what challenges do the police face in ending this menace? Read on to find out:

What’s the 'FedEx' scam?

The perpetrators, notoriously known as the ‘FedEx scamsters’, play to the victims' fear. They hold them under duress after claiming that a package in their name contains illicit drugs and that they are involved in “money laundering” or terror activities. As many as 111 such cases have been registered in Bengaluru until November this year. The American cargo company has nothing to do with the scam. It doesn't request personal information through unsolicited phone calls, mail or email for goods being shipped or held unless requested or initiated by customers.

How does it work?

It all begins with the victim receiving a phone call from an unknown person claiming to be a member of the ‘FedEx’ service staff. The caller tells the victim that a package in his/her name being sent to Taiwan or any other country has been confiscated by Mumbai customs because it contained drugs or other illegal items. The victim is then connected to a "police officer", more commonly from the Mumbai Crime Branch or the Anti-Narcotics Unit.

The so-called officer then cooks up a story that the victim's bank accounts were either linked with money laundering or terror activities, and cajoles them into revealing the balance. The victims are then made to transfer the money to a "stipulated account" for verification. In many cases, victims were held under duress for several days and even placed under illegal confinement.

Why is the scam so worrying?

Despite attempts at awareness, cases of the 'FedEx' fraud are being reported in Bengaluru every other day. In early December, a businessman and his wife were illegally confined in separate hotel rooms for two days by ‘FedEx’ scammers who managed to con Rs 1.98 crore out of them. Before that, a retiree was held under duress for 15 days and forced to pay the scamsters Rs 9.14 crore. 

What are the police doing to bust the scam?

The Criminal Investigation Department (CID) is trying to get into the scamsters' skin by decoding their methodologies and modus operandi. At its Centre for Cybercrime Investigation Training and Research in Bengaluru, the CID is imparting focused training to its sleuths so that they stay a step ahead of the criminals. "We are introducing new training courses to help our offices cope with the latest modus operandi and methodologies," says CID boss Dr MA Saleem. 
What are the challenges in the investigation?

This is one of the scams where mule accounts and cryptocurrency play a key role. While mule bank accounts are used to park and route the proceeds of the crime, the money trail becomes extremely difficult to find once the lost sum is converted to cryptocurrency, according to senior officers.

The first arrest of eight people in the ‘FedEx’ scam recently shed some light on their operations. From the suspects, police recovered Rs 13.17 lakh in cash, froze Rs 19 lakh in bank balance and cryptocurrency USDT (Tether) worth Rs 4,500, and found 148 “mule bank accounts”. 

Saidulu Adavath, Deputy Commissioner of Police (North), whose team arrested the eight, said: "While the eight were not the main perpetrators, they played a key role in setting up the mule bank accounts to transfer the proceeds of the crime and then withdraw them.” 
Police have established that the suspects formed the second layer of the fraud, bought US cryptocurrencies and handed them over to the main fraudsters for Indian rupees in return. They do a lot of layering and transactions with different crypto traders, the DCP said.

What should you do if scamsters contact you?

If you receive any suspicious phone calls or messages, do not share your personal information. You should immediately contact the local law enforcement authorities or report to the national cybercrime helpline 1930 or the National Cybercrime Reporting Portal (https://i4c.mha.gov.in/index.aspx).