Law enforcement officials in Romania and the United States have arrested and charged more than 100 individuals in connection with an organized fraud ring that used phony online auctions for cars, boats and other high-priced items to bilk consumers out of at least $10 million.
According to a statement from the Justice Department, the scams run by this ring followed a familiar script. Conspirators located in Romania would post items for sale such as cars, motorcycles and boats on Internet auction and online websites. They would instruct interested buyers to wire transfer the purchase money to a fictitious name they claimed to be an employee of an escrow company. Once the victim wired the funds, the co-conspirators in Romania would text information about the wire transfer to co-conspirators in the United States known as “arrows” to enable them to retrieve the wired funds. They would also provide the arrows with instructions as to where to send the funds after retrieval.
The arrows in the United States would then visit wire transfer services such as Western Union or MoneyGram, provide false documents including passports and drivers’ licenses in the name of the recipient of the wire transfer, and grab the cash. They would subsequently wire the funds overseas, typically to individuals in Romania, minus a percentage kept for commissions. The victims would not receive the items they believed they were purchasing. In some cases, co-conspirators in Romania also directed arrows to provide bank accounts in the United States where larger amounts of funds could be wired by victims of the fraud.
Since February 2011, FBI agents and U.S. Justice Department authorities in Florida, Pennsylvania and Texas have arrested or charged at least 21 Romanians and Moldovans in the U.S. who were allegedly members of the ring. Thirteen of those charged have pleaded guilty, and three remain at large.
The Bucharest news agency Adevarul.ro has more details on the 90 Romanians arrested by authorities there in nine different cities. The Romanian authorities say the group stole almost $20 million, about twice as much as the Justice Department estimates.
Some of the Romanians arrested were from the town of Râmnicu Vâlcea, a location that has become synonymous with online auction fraud. In January, Wired published a fascinating and readable article on how this remote town of 120,000 residents has become cybercrime central, earning the town the nickname “hackerville.”