When we see 25 Chinese arrests, it might be tempting to think this is all Chinese Organized Crime, but those who actually watch the videos will realize that's not the case. The referenced videos are from late 2020 and early 2021 and each started with Scammer Payback (Pierogi) responding to a refund scam.
Indian Call Center operators refer to this type of "lead generation" as "email blasting" and we have tens of thousands of example posts from Facebook groups offering the "service" of sending bogus Microsoft Defender emails, claiming that the victim's credit card is being charged and offering a telephone number to dispute the charge. The ads for this service in Tech Support Facebook groups have been constant for years, including ads as recently as this week:
We've called dozens of these numbers and they all follow a similar script, they convince the caller to allow remote control to their computer to assist them with the "refund." We often feed a Virtual Machine to the scammers and use it to help us understand what remote control tool they are using and where it is hosted. But Scammer Payback goes quite a bit further!
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| Scammer Payback: https://www.youtube.com/watch?v=hrLZbc-Rfbo |
Being a very compliant victim, Scammer Payback agrees immediately, taking down the address and agreeing to send the package of cash "overnight delivery." At this point, Pierogi engages the Trilogy media team. Trilogy agrees to take their camera crew to the pick up site to find out who is on the other end of the package.
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| Trilogy Media: https://www.youtube.com/watch?v=in_Y5q_-F2Y |
But in three out of three cases where Pierogi uses Trilogy to deliver a cash package, the package is being sent to a young Chinese person who is at an Air BNB that has been rented for a very short time period.
We actually have seen this model in other cases ... in 2022, we write about the case of Jianjie Liu on this blog in a post called "Chinese Call Center Runner Pleads Guilty in Georgia."
Jianjie Liu did cash pickups for a wide variety of scams, including Grandparent scams, Inheritance scams, and Government Grant Scams. She was actually arrested in a case involving Walmart Gift Cards that led to the discovery of 718 Gift Cards in her vehicle. In one case almost exactly like those above, Liu was sent a $20,000 Cashier's check after someone processing a $555 refund was accidentally refunded $20,555 and had to send the difference back to the scammers. The check was made payable to a shell company in Georgia controlled by Liu.
Where do these Chinese agents doing the cash, check, and gift card payment come from? Recently it is one of the most popular "Crime As A Service" offerings from the various Chinese Guarantee Syndicates. Each of the Guarantee Syndicates has a menu of vendors who have made a large deposit in USDT in order to have the right to sell their services there. This category is usually called some variation of "Collection Services."
You may have heard of "Huione Pay" which is generally considered the largest of the Chinese Guarantee Syndicates. FinCEN took action, with an announcement that "Cambodia-based Huione Pay" is a money laundering concern, and proposing new Rule-making calling them a "Primary Money-Laundering Concern" to combat this type of cybercrime. After this announcement, Huione migrated most of their vendors over to a former competitor, Tudou Danbao (which means "Potato Guarantee.")
The "Buy and Sell" channel for Potato currently has 130,000 subscribers, while one of their primary channels has 209,000 subscribers. Category 2 on their vendor menu is "Collection Services" which currently has 656 vendors who have paid deposits between 15,000 USDT and 259,000 USDT to have their services recommended and advertised by the new Guarantee Syndicate. These are the teams that are offering cash pickup services across the United States.
The "Buy and Sell" channel for Potato currently has 130,000 subscribers, while one of their primary channels has 209,000 subscribers. Category 2 on their vendor menu is "Collection Services" which currently has 656 vendors who have paid deposits between 15,000 USDT and 259,000 USDT to have their services recommended and advertised by the new Guarantee Syndicate. These are the teams that are offering cash pickup services across the United States.
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| (findings from non-profit Intelligence for Good) |
The US Financial Crimes Enforcement Network (FinCEN) has issued two recent reports about Chinese Money Laundering Networks. One is an advisory regarding the use of Chinese Money Laundering Networks by drug cartels from Mexico. The other has detailed analysis on several different models used by Chinese Money Laundering networks.
Several "Red Flags" are shared as advice to Financial Institutions to help them recognize CMLO behaviors that should be reported via Suspicious Activity Reports:
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