Early last month federal investigators raided the Minnesota home of Winona State University students Tram Vo and Khoi Van, both 22, and seized computers, thumb drives, documents and other items.
The investigation, called Operation eMule, began in September 2009 and is targeting a Vietnamese-based international fraud gang made up of numerous individuals in different roles – including computer hackers, fraud managers and sellers of stolen personal identity and financial information, according to a search warrant affidavit obtained by the Minnesota Star Tribune, which first reported on the investigation. The fraud operation also relies on an extensive ring of money transfer mules in the United States.
According to the search warrant affidavit, members of the fraud ring use stolen identities to open accounts with eBay, PayPal and U.S. banks. The fraudsters then list popular items – like Rosetta Stone software, video games, textbooks and Apple iTunes gift cards – at discounted prices for sale on eBay.
Once a buyer has paid for an item via PayPal, the scammers fill the order by purchasing the merchandise online from legitimate retailers using stolen credit card information and have the item shipped directly to the eBay buyer. The legitimate retailers ultimately lose money when identity theft victims protest the charges.
Lastly, money mules transfer the illegal funds from PayPal into various U.S. bank accounts, then ultimately to other accounts overseas.
“The communication is conducted through a secured internet website accessed by vetted members only,” the search warrant affidavit states. “The illicit funds and high end electronic merchandise that are part of the Vietnam Underground economy are estimated to exceed hundreds of millions of dollars.”
The two Minnesota students, Vo and Van, are believed to have controlled hundreds of eBay and PayPal accounts that were opened using the stolen identities of U.S. victims. According to the search warrant affidavit, they collected more than $1.2 million in illicit funds and transferred much of the money to accounts in Vietnam and Canada. Public records currently show no criminal charges against the students.
Operation eMule is ongoing. Federal law enforcement officers with the Homeland Security Investigations in Minnesota are working on the case with the National Cyber Crimes Center, part of the U.S. Immigration and Customs Enforcement.