Canada fraud scheme linked to terrorist activities

CALGARY - A criminal cell operating across Canada is funnelling millions of dollars to Dubai to fund terrorist activities through a sophisticated credit/debit card fraud scheme, says the head of Alberta's Integrated Response to Organized Crime unit.

It is but one of a number of ''extremely prevalent'' organized crime groups reaping huge profits from an old crime with a new twist, says Insp. Joan McCallum.

''You can make a million dollars a weekend in Calgary,'' said McCallum, noting the group also travels a ''circuit'' from Vancouver to Calgary to Toronto to Montreal. ''For one of the groups, it (cash) goes straight to terrorism in Dubai and some of the other countries. They live on nothing and send all their money to fund terrorist activities.''

Improved criminal technology now involves the insertion of a memory chip to record data into keypad terminals customers use at retail counters, gas stations and restaurants. Criminals target the little black terminals handed to a customer to punch in numbers by simply unplugging them and carrying them off.

''A lot of merchants leave those on the counter. The criminal will modify it to add a memory chip to the terminal,'' said Const. Stephen Macumber of the Calgary police commercial crime unit.

Because the terminals are generic, and many retail outlets use the same kind, they are easily transferable. When a card is swiped, the data goes to the credit card company. A memory card that's been placed inside records magnetic data for the crime group.


''They leave it there a few weeks and go back and steal it again,'' said Macumber. ''The only protection people do have with a credit card is sunk.''

This method only works for credit cards. For debit card fraud, a camera is hidden in the ceiling to record PIN numbers, he said.

''If it is a debit card, they still need a PIN. The camera will be hooked up to a digital recording device with a hard drive that can sometimes run 30 days.''

Gas stations top the list of identified problem sites, but every retail outlet is at risk, he said.

Citing ongoing investigations, McCallum declined to name the terrorist group that's the recipient of the illegal flow of cash making its way to Dubai, one emirate that makes up the United Arab Emirates on the Persian Gulf.

''They get a stronghold because they get more sophisticated with the technology. There are so many little devices you can put into a debit machine,'' said McCallum.

That a terrorist group is being funded locally doesn't surprise Calgary Tory MP Art Hanger.

''Sleeper cells have been pointed out in Parliament. It is no surprise they are funding organized terrorist operations.''

This shows the importance of having a national strategy to fight organized crime, he added.

''There are going to have to be solid links with agencies like Interpol and the U.S. Marshals whatever connections that can be built,'' said Hanger, who was recently named chairman of the all-party federal justice committee.

''I think we are going to see more and more of this international criminal.

Setting up these operations is easy, said Macumber.

''This particular method we're seeing only started cropping up in a serious way six to nine months ago. This is certainly national in scope, possible connected to the U.S.''

Det. Spencer Frizzell, of the Calgary police commercial crime unit, questions where the proceeds go, considering the lifestyles of many individuals involved in there crimes doesn't drastically change.

For the most part, proceeds from credit card fraud is converted to cash. Organized crime groups will send in ''teams of people'' from other areas of the country to attack ATM accounts, said Frizzle.

''This type of crime is embracing technology and maximizing it.''