Scam victims groomed as money launderers

Tuesday, 28 October 2008 19:21

The Office of Fair Trading(OFT) says that prize draw scam victims are unknowingly being groomed as money launderers for the savings of other victims.

Elderly scam victims are being tricked into acting as so-called “money mules” by putting cheques into their banks and then transferring the money abroad.

The national watchdog says that these are the first cases of this type to be discovered in the UK, and so far at least 22 pensioners have been tricked by the scammers. Collectively it has cost them £350,000.

The OFT says that victims in Westminster, London have been duped into passing over their own money before being taken to the next stage, where they “process” payments from other people. Sue Jones of Westminster Trading Standards said that the scam had been seen before in the US and Canada.

The scam works like this:

1. Victim A gets a letter saying (s)he has won money in a prize draw, but must send money to “release” their prize. Victim A sends the money to a UK address
2. Victim B receives the letter sent by Victim A, and is told to send the same amount by electronic transfer to an untraceable bank account abroad
3. Victim A loses their money
4. Victim B neither makes nor loses any money, but is still waiting for a prize from a previous scam and believes that the money transfer is evidence that prizes are available

Sue Jones said that people should ignore unsolicited letters, telephone calls or emails telling them they have won in a prize draw.

The so-called release cheques have often been for thousands of pounds, sent to UK agents to release the prizes supposedly held at UK airports. Confidence in the scam being real is built by the use of UK addresses. However, the recipients at the UK addresses are also victims who are told to send the money electronically to Canada – the real scammers.

The elderly are prime targets for the fraudsters.

One victim was encouraged to borrow money after his own savings had been exhausted - so he remortgaged his house. Sadly, he has since defaulted on his loan repayments and his bank is threatening legal action.

In Warwickshire, a 92-year-old man lost thousands of pounds of his own money and was inadvertently responsible for laundering more than £17,600. He was targeted by the scammers after his wife died. She had been the original target of the scammers and had already lost £15,000.

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