Apr 5, 2012, 11:24 am
A Saratoga County, New York, man may have lost more than $100,000 in an international email-based scheme that used fraudulent IRS forms to dupe victims into believing they'd won a multi-million dollar lottery but needed to pay fees to collect their winnings.
A 14-month investigation by the U.S. Treasury Inspector General for Tax Administration uncovered a trail of email and bank accounts that led to European suspects who had obtained credit card and bank account information for an unknown number of victims.
Federal search warrant records show the investigation began in February 2011 after the Internal Revenue Service received a complaint that John Patrick Killian, 80, of South Glens Falls, had transferred large sums of money to an account at National Westminster Bank in the United Kingdom.
"The scheme utilized in this case is a form of 'phishing' designed to contact potential victims through email, notifying them that they are the apparent winner of a large sum of money and valuable merchandise," according to a search warrant affidavit signed last week by a Treasury Department special agent. "Those who respond to the initial emails are then told that they must pay various fees and taxes in order to collect their winnings."
In June 2008 Killian started getting emails "from individuals purporting to be from the IRS, Royal Bank of Scotland and the World Bank informing him that $8.3 million dollars contained in a bank account in his name, was available for his withdrawal," according to the search warrant affidavit.
"Based on subsequent interviews with the victim and analysis of 26 suspicious activity reports ... and five currency transaction reports, it was determined that the victim has lost in excess of $100,000 to the scheme," the agent's affidavit states.
In an interview this week Killian said he did not believe he lost that much money. He said federal authorities told him not to talk about the investigation.
"I can't say anything. They told me nothing," Killian said. "I'm going to do as I'm told."
Last March, according to the search warrant, Killian transferred $5,000 from an Albany bank to the London bank account.
The search warrant, which was filed under seal last week in U.S. District Court in Albany, authorizes federal agents to obtain information from the California-based Yahoo Inc. on an email account believed to have been used by the suspects.
Similar search warrants were executed on Yahoo email accounts last November and in January that led authorities to a bank account in London that was owned by Amar Khan, who was arrested a year ago in Greater Manchester, England, on charges of fraud and money laundering. Public records show Khan is listed as a director for a British company, Illuminati Fashions LTD, that also was listed on the same bank account number used in the alleged scheme.
The status of Khan's criminal case in Great Britain could not immediately be obtained Wednesday.
The investigation of Killian's losses is being handled by the U.S. Attorney's Office in Albany. It's unclear whether there are additional local victims.
"We can't confirm or deny the existence of an investigation," said Assistant U.S. Attorney Robert Storch, a spokesman for the office.
A spokesman for the U.S. Treasury Inspector General also declined comment.
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