Foreign Fraud Gangs Are Ripping Off West Coast States

Foreign criminals “see Americans as a big, fat target.”

The Somali fraud scandal has captured Americans’ imaginations. The story is almost unbelievable: Somalis in Minnesota allegedly set up fraudulent housing services, meal programs, and autism-therapy offerings, which formed part of a “web” that stole “billions of dollars in taxpayer money.” Some fraudulently obtained funds, according to federal law enforcement sources, ended up in the hands of Al-Shabaab terrorists.

Meantime, on the West Coast, another pattern of fraud has taken root: foreign criminals have developed sophisticated schemes to cheat and steal from unsuspecting Americans. I spoke with a veteran blue-city police detective, who has spent two decades investigating serious crimes, in order to learn more about how these groups operate and what might be done to stop them.

We granted the source anonymity so he could speak candidly about the fraud and the politicians who have enabled it. The interview has been edited for length and clarity.

Christopher Rufo: We’ve seen the Somali fraud schemes in Minnesota, but in the West Coast, there seems to be another pattern: foreign fraud rings ripping off Americans. What are the most common schemes you’re seeing here?

Detective: The two most common I investigate are credit-card fraud and elder fraud. I noticed that in cases involving a high dollar amount—$1,000 or more—and that target a stranger, it’s almost always perpetrated by foreigners.

A typical organized-crime credit-card crew would be from Romania. They will come to the United States by sneaking over the Mexican border and go up and down the I-5 corridor. They steal credit cards out of gym lockers at fitness clubs.

They’re very sophisticated. They have a computer and a printer in their car. They will steal your credit card, and if your phone’s there, they will steal the SIM card. Once they get to their car, they will immediately make a fake ID that matches those credentials.

Then, they’ll go downtown to a jewelry store and buy a Rolex watch for $40,000. If the bank sends you an alert asking if you made the purchase, the thieves have your SIM card and your ID, so they reply, “Yes.” Eventually we’ll catch up with them, but then they just go elsewhere. They’ll start out in Los Angeles, then go up to Salem, then Portland, then Vancouver, Olympia, and Seattle.

Though they involve large sums of money, these are nonviolent crimes, so the justice system doesn’t take them that seriously. Eventually these criminals will get caught, but they are not extraditable out of state, and we’re not allowed to call immigration. They’ll have Romanian passports, but nobody ever picks up the phone and calls ICE because it’s against the law in blue states to call them. They do a few months’ time and then are out again.

Rufo: What are some of the other schemes that you’ve seen, and how do they work?

Detective: Here’s a typical case of elder fraud. Grandma is using her computer, and a pop-up, apparently from Microsoft, appears and says, “Your computer’s infected, you need to call this number.” Grandma calls the number and is connected to a call center in Eastern Europe. (I had one case where the call center was in Moldova.) The call center operator tells Grandma, “Your account’s been compromised. We need to keep your money safe.” And while I can’t believe Grandma is gullible enough to do it, she pulls $30,000 out of her checking account, puts it in a paper bag, and hands it to a courier, who—in the cases I’ve seen recently—is usually a Chinese national who doesn’t speak English.

They will do this all day long; it’s like an Uber service for fraud. They have a script. The courier speaks enough English to say the code word, and the victim hands over the money. These scams are hard to investigate because everything the couriers do is in Chinese, and I can’t go to Moldova, where the money winds up, to track it. It’s just gone.

Rufo: Is there a Latin American element, or a Nigerian element? Have you seen that?

Detective: Yes, it’s common. There’s now an abbreviation, SATG: “South American theft group.” The cartels are smart. They diversify—they don’t just do drugs, they do sophisticated robberies and burglaries.

They do surveillance and gather inside information. Then, it’s four guys jumping out of a car with guns, and they grab a bag of cash or jewelry. A lot of times, they’re victimizing other legitimate immigrant businesses, like grocery stores that are making night drops of all their receipts from the day. Other times—and this has been in the headlines—they target celebrities and professional athletes, breaking into their homes. They’re very professional and fast.

With the Nigerians, the cases I’ve seen are mostly online. You get the romance scams—people in bad emotional states who strike up a friendship online and send money overseas. The fraudsters give a ridiculous story, like “I’m a soldier deployed to the Middle East. I found a supply of gold, but I need to export it, so I need to pay the export fees.” And the victims just go along with it and empty their life savings. It’s a dead end once the money goes out of the country.

Rufo: It’s remarkable. We have fraud schemes emanating from every continent on Earth. Why is this happening, and why can’t we stop it?

Detective: Something like one-third of the wealth in the globe is in the United States, and we’re just a hair over 4 percent of the population, so it only makes sense for criminal groups to focus on America. Additionally, in blue states, it’s a taboo to focus on immigrant communities. Politicians have passed “sanctuary state” laws and reduced criminal penalties, which, in effect, are advertisements saying, “We’re open for business for fraudsters. You probably won’t get caught. If you do get caught, you probably won’t get convicted. If you do get convicted, you won’t get that much time. And you never have to worry about getting kicked out the country.”

In my experience, nearly 100 percent of high-dollar, stranger-on-stranger frauds are committed by foreigners. I cannot think of one case of mine where a native-born American committed a fraud over $1,000 against a stranger. Not in my entire career.

Rufo: And they just get away with it?

Detective: It’s frustrating. Fraud cases are so time-consuming that, if they’re even assigned, you can’t get too emotionally involved, because they’re hard to solve and not much is going to happen. You have some old lady who hands over a box full of her life savings to some random man on the street. We get so many of these cases that only the ones with really good evidence get assigned. And even those can be difficult, because you kind of hit a dead end once money leaves the country.

I don’t have access to exact data, but I would estimate that 90 percent of the cases are just “a report’s taken and that’s it,” and nobody follows up on it. Fraud is a huge problem—and foreigners from poorer countries see Americans as a big, fat target.