Organized crime suspected of being behind COVID-19 phishing and counterfeit-equipment scams

Organized criminal groups are adapting their illegal operations to the COVID-19 pandemic, preying on people's fears and vulnerabilities — and successfully scamming Canadians, according to the RCMP. 

Since the beginning of March, more than 1,000 COVID-19 related crimes have been reported to the RCMP's Canadian Anti-Fraud Centre. Of those, 269 people reported losing either money or personal information. 

The RCMP says organized crime groups are believed to be behind the majority of schemes being reported and that fraudsters are "highly active" right now.

These co-ordinated crimes can involve participants in multiple countries.

The RCMP defines organized crime as three or more criminals working together. They might be longstanding groups or temporary alliances formed to carry out a specific criminal venture. Their crimes range from fraud and identity theft to the trafficking of guns, drugs and people. 

"They insert themselves into anything that they can benefit from," said RCMP Supt. Wills Thomas, director of federal policing, serious and organized crime, in an interview.

"So with the pandemic, they are looking at all these new activities and new opportunities … to be kind of a predator to the insecurities of people."

Canadians have lost approximately $1.8 million through scams related to COVID-19 since the beginning of March. But those are only the losses that the RCMP has learned about through reports to the centre. There could be more victims who have not come forward, police say.

'Tip of the iceberg'

"What we see is typically the tip of the iceberg," said Sgt. Guy Paul Larocque, acting officer in charge of the Anti-Fraud Centre.

"Some people find it can be cumbersome to report, or they just don't want to bother with it, and one of the reasons is because sometimes the shame or embarrassment behind it … they just take the loss."

Larocque said one of the most common schemes the RCMP is seeing is an email or text message asking the recipient to click on a link to collect money from the federal government's new Canadian Emergency Relief Benefit (CERB). 

The link goes to an illegitimate website asking for financial information or a social insurance number, or it might allow for malware to be downloaded on the person's device, all of which could lead to financial theft.

These phishing scams tend to follow a pattern, said Larocque. The groups use the same model and just change the wording. Canadians might be familiar with one that started a few years ago where fraudsters send email and text messages and make phone calls purporting to be from the Canada Revenue Agency.

The "CRA tax scam" has cost Canadians more than $17 million. Two people were arrested in February in Brampton, Ont., accused of being accomplices in a global scam.

If Canadians get these kinds of texts or emails, Larocque said they should report it to the Anti-Fraud Centre and take a screengrab if possible. The CRA also has information on its website about these scams.

One scam that targets unemployed Canadians involves applying for a work-from-home job they see advertised online. Applicants end up sending personal information and sometimes money to criminal organizations purporting to be legitimate businesses. They never get a job out of it. 

Counterfeit medical products

Other pandemic-related fraud includes:

• Products offered online that never arrive.
• Sales of counterfeit, unauthorized or substandard medical goods.
• Sales of fake COVID-19 test kits and remedies.
• Romance scams, where economic hardship caused by the pandemic is used as an excuse to ask for money. 

The European Union's law enforcement agency, Europol, says in a report that criminal organizations were quick to adapt their product portfolios to exploit the shortage of genuine products such as hand sanitizer and face masks, and that they're peddling fake COVID-19 test kits.

The trade in counterfeit and substandard health-care products has "boomed during the pandemic," according to Europol.

The agency says scammers are already offering fake COVID-19 vaccines and that once a genuine vaccine is developed, fraudsters will invest heavily in making a counterfeit version.

The RCMP and Health Canada say counterfeit and unauthorized health-care products are circulating in Canada. 

Fake N95s, unauthorized test kits

Acting on a tip to the Anti-Fraud Centre, RCMP in B.C. and Health Canada recently seized 1,500 COVID-19 test kits that were not authorized to be sold in Canada. No criminal charges were laid by the RCMP, but the man selling them online still could be charged with an offence of the Food and Drugs Act. The case is in the hands of Health Canada.

Health Canada is warning Canadians not to buy products described as home diagnostic kits. It has also warned about fraudulent and uncertified N95 respirator masks being sold illegally in Canada, both online and in stores. 

Antonio Nicaso, a Toronto-based expert on the Mafia and organized crime, said in an interview that criminal groups are trying to sell masks, hand sanitizer and other related products. In some countries, they're making counterfeit medicines.

"They are heavily involved in this business," said Nicaso, who has written 30 books about organized crime and lectures at Queen's University in Kingston, Ont.

He said organized crime is also behind some COVID-19 cyberscams and that these are increasing in Canada and around the world in part because traditional revenue sources for criminal groups have been hurt by the pandemic.

No sports, no gambling

"When the economy is in a shutdown, organized crime also suffers," said Nicaso.

There's no gambling on sports right now, for example, and with bars, restaurants, and businesses closed, it's harder for groups to collect protection money, or carry out extortion, said Nicaso.

The illegal drug trade, their most lucrative income source, has also been affected. Some producers are having trouble getting the chemicals they need, and international border restrictions have made it harder to smuggle products.

"But, of course, they find a way. They adapt," said Nicaso.

Nicaso said he worries about the opportunities that lie ahead for criminal groups as the pandemic continues to hurt the economy.

"The criminals may be able to purchase failing businesses or to lend money to their owners to prop them up," he warned. "They may try to exploit the economic crisis." 

Nicaso said organized crime has a "very strong, very powerful" presence in Canada and that every major international group has a branch here. Those include the Russian Mafia, the Sinaloa drug cartel, the Italian criminal organization 'Ndrangheta, and motorcycle gangs such as the Bandidos and the Hells Angels.

The RCMP says it works closely with its domestic and international partners to break up these crime rings, and that it's trying to educate Canadians about the kinds of frauds carried out by these groups.

"Canadians are losing a huge amount of money to fraud," said Larocque, of the Anti-Fraud Centre. "It shows that scammers are aggressive, persistent, and they are going to keep coming back."