The Dominican Republic has dismantled a transnational cybercrime network believed to have defrauded hundreds of US citizens to the tune of more than $200 million, in just the latest example of the growing threat posed by financial crime operations in the Caribbean.
Hundreds of law enforcement officials carried out a series of raids March 2 as part of Operation Discovery, an investigation authorities started more than a year ago to break up a criminal network that allegedly defrauded its victims via economic and sexual extortion, as well as identity theft, according to an official press release.
Authorities arrested around 70 people who allegedly worked for the cybercrime ring in call centers in Santiago, Santo Domingo, La Vega and Puerto Plata. During the raids, officials seized $400,000, more than 19 million Dominican pesos in cash (almost $350,000), up to 30 luxury vehicles, as well as hundreds of pieces of electronic equipment, such as computers and cell phones, and a number of firearms, according to official information released by prosecutors.
US agents from the Federal Bureau of Investigation (FBI) carried out simultaneous raids in New York City, although the agency has yet to release any information on those operations.
The criminal group used various identity theft schemes to extract money from victims. In one, local media reported that individuals working in these centers used caller-ID spoofing services to fake their identity and demand extortion payments from individuals after threatening to kidnap family members.
In another, members of the criminal network targeted people who had prescriptions of highly controlled drugs and medications. After offering these patients medicine without their doctor's prescription, they delivered it to their homes. Then, a network member would contact the same patients posing as a member of the FBI, demanding the victim make payment to an account or network address to avoid prosecution.
The Attorney General also claimed the criminal network trafficked illegal firearms with the help of a separate criminal organization called the Trinitarios. The Trinitarios are one of the most active Dominican gangs domestically and abroad, with operations in New York, Spain and Italy. Its members have previously been arrested in the United States for arms trafficking and racketeering, among other charges.
In order to launder their extortion proceeds, the network allegedly used cryptocurrencies, deposits through remittance companies, and fraudulent money transfers, according to local media reports. In total, the Attorney General's Office estimated the cybercrime network moved around $250 million.
InSight Crime Analysis
The recent dismantling of the cybercrime network touches on two important points: a continued crackdown on organized crime in the Dominican Republic and the rise in fraud schemes based in the Caribbean.
Cybercrime in the Dominican Republic has increased considerably since the start of the COVID-19 pandemic, according to prosecutor Marineldy Peña Hernández of the Office Against High-Tech Crimes (Procuraduría Especializada Contra Crímenes y Delitos de Alta Tecnología - PEDATEC). Dominican newspaper El Nacional even reported that cybercrime had become more lucrative than drug trafficking in the country during the early stages of the pandemic, presumably due to the difficulty of transporting drug shipments internationally during initial lockdowns.
What's more, sexual extortion also skyrocketed during the beginning stages of the pandemic, as businesses and schools closed their doors and social life moved online. "Sextortion," as the crime is known, happens when victims send compromising photos to others, who then demand payment in exchange for not releasing the images publicly.
The Dominican Republic has long-established laws and regulations aimed at fighting cybercrime. In 2013, the government created the special prosecutor's office that Peña Hernández now leads, which played a central role in Operation Discovery and focuses mainly on cybercrimes like card cloning, phishing scams, illegal electronic money transfers, telephone fraud, electronic blackmail and identity theft.
Since coming to power in August 2020, President Abinader has prioritized the fight against corruption and organized crime. While much of his crusade has focused on going after graft in government, financial fraud and cybercrime are a growing concern. At the end of last year, in October 2021, the Dominican Republic joined over 30 countries across the globe as a signatory of the initiative against ransomware and data hijacking.
Across the Caribbean, there is a concerning trend regarding the growth of cybercrime. During the first year of the pandemic, numerous Ponzi and pyramid schemes cropped up in Guyana, Trinidad and Tobago, Barbados, Antigua and Barbuda, as well as other Caribbean nations. First reported by the Caribbean Investigative Journalism Network (CIJN), the schemes involved victims recruited online and asked to invest tiny sums of money, sometimes as low as $5, in exchange for massive returns.
Some countries have since passed legislation to fight against the wave of cyber schemes. New changes to a cybercrime bill in Guyana fines cybercriminals up to $5 million for orchestrating fraudulent endeavors. And last year, officials in Barbados assured journalists that they actively identify and report financial and cybercrimes.
In a recent meeting between Caribbean Community (Caricom) security ministers, Caricom Secretary General Carla Barret listed cybercrime as the third-largest security concern behind the situation in Haiti, trafficking and human smuggling.