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Alleged 'mule' arrested over $100K investment scam involving North Shore real estate agent

Publish Date
Wed, 14 Jun 2023, 11:37am
Carla O'Neil, 45, believed she had done due diligence and that the investment opportunity was legitimate. Photo / Michael Craig
Carla O'Neil, 45, believed she had done due diligence and that the investment opportunity was legitimate. Photo / Michael Craig

Alleged 'mule' arrested over $100K investment scam involving North Shore real estate agent

Publish Date
Wed, 14 Jun 2023, 11:37am

A Hamilton man accused of being a “mule” to launder money for scammers who stole $100,000 from a North Shore real estate agent in an elaborate investment ruse has been arrested by police.

Carla O’Neil was tricked into wiring the money to an ASB bank account earlier this year, believing the cash was going into a Citibank term deposit.

She says she’s thrilled police have made an arrest in her case and that the issue is gaining traction nationally and being taken seriously by authorities.

But she had been inundated with stories from other scam victims since going public last month - with their losses tallying at least $40 million.

The rapidly growing number of cases could easily be stopped if banks had better protections in place to protect customers, O’Neil told the Herald.

“It’s not a Mickey Mouse scam, it’s sophisticated. They are taking millions out of this country.”

The professional 45-year-old was scoping investment opportunities in January to grow her money while she saved for a house. She found a website comparing bank term deposit rates and registered her details.

She was contacted by an “intelligent and well-spoken” man with an English accent claiming to be a Citibank portfolio manager. He sent her prospectus information about the US financial institution’s fixed-rate bonds and term deposit options.

He appeared to use a Citibank email address and provided an Auckland phone number, but was actually a scammer - likely based offshore and linked to a growing number of sophisticated fraud cases targetting Kiwi victims and involving millions of dollars in lost funds.

Convinced the investment opportunity was legitimate, O’Neil visited her local BNZ branch on February 17 and transferred $100,000 to an ASB account specified on a Citibank-branded payment invoice supplied by the scammers.

She was then emailed log-in details to an elaborate online “client portal” where she could see her money had been received into the supposed term deposit account and track her investment as it accrued interest.

But none of it was real.

A fake Citibank investor portal used in an elaborate scam to defraud a North Shore real estate agent out of $100,000. Photo / Supplied

A fake Citibank investor portal used in an elaborate scam to defraud a North Shore real estate agent out of $100,000. Photo / Supplied

A month later BNZ phoned O’Neil and informed her she had been scammed. A freeze was put on the recipient account and ASB was able to retrieve nearly $20,000 of the stolen money. The rest of the funds had already been moved on.

Police initially told O’Neil the recipient was likely a “mule” caught up in the trickery, either moving money on as part of a romance scam, or their internet banking had been hacked by the thieves.

However, police arrested a Hamilton man last month in connection with the fraud.

He was charged with two counts of money laundering - one involving O’Neil and the second charge involving another victim who lost $135,000 just three days before her.

The 54-year-old defendant appeared in Auckland District Court on May 31 and was remanded on bail until later this month.

Police said: “This is an emerging scam but is the latest in a long line of schemes designed to deceive people for financial gain.

“Scammers behind these schemes usually reside overseas, which poses challenges around enforcement action.”

Yesterday, police announced they had made several “significant” arrests connected to attempts to shut down sophisticated financial scams that had bled millions of dollars from Kiwi victims.

They include the 54-year-old man charged in relation to O’Neil’s stolen money, and a 60-year-old man who allegedly stole nearly $2m from two other victims.

The scams all involved elaborate investment opportunities where victims had searched online for term deposits, registering their details on fake websites and inadvertently putting themselves in touch with scammers.

Detective Senior Sergeant Craig Bolton said after the victim transferred money into a New Zealand-based account held by a “money mule”, the mule would send the funds offshore.

Money mules are people who transfer illegally obtained money on behalf of somebody else. They’ll launder proceeds from scams by allowing their personal bank account to receive money and then hand the cash to an overseas party.

“If you are receiving money into your account from people you have not met and don’t know and keeping some of the money for yourself before sending the bulk of the money overseas - you are a money mule and you could be arrested and prosecuted for money laundering,” Bolton said.

Carla O'Neil lost $100,000 in an elaborate investment scam in which she thought she was putting the money into a Citibank term deposit. Photo / Michael Craig

Carla O'Neil lost $100,000 in an elaborate investment scam in which she thought she was putting the money into a Citibank term deposit. Photo / Michael Craig

O’Neil told the Herald the lost money was her life savings and losing the funds to scammers was “heartbreaking”.

She was thrilled with the recent arrests and glad people were speaking up and the crimes being taken seriously by police.

But she believed banks needed to up their game in protecting customers by having better systems in place to identify scams and fraudulent money transfers.

“They’re saying to me it’s because I authorised the payment. But the banks have known about this [scam] for more than 12 months and nothing has been done. That just frustrates me. It can easily be stopped.”

BNZ said O’Neil had unintentionally engaged with scammers during an online search for financial services. The money had been sent to a valid New Zealand bank account and documents O’Neil provided to BNZ showed no evidence the $100,000 transaction was a scam.

“These investment scams prey on people’s trust in reputable brands and mimic investment firms and banks closely. No organisation is immune from impersonation.

“Anyone seeking financial services should contact investment firms through their official New Zealand-based websites and never via unprompted online contacts, emails, links or phone numbers sent directly to them, or on other websites they find on the internet.”

TIPS TO AVOID SCAMS

  • Scams continue to evolve and use more sophisticated methods to deceive the public – the age-old saying “if it sounds too good to be true, it probably is”, is a good rule of thumb.
  • Police encourage people to research “broker” companies online before engaging with them.
  • Scammers will pose as brokers for a number of established banks.
  • The Financial Markets Authority publishes the names of suspicious companies on their website.
  • Always talk to your bank or another financial professional before making large online investments.
  • If returns are higher than usual,it’s probably a red flag.Doyour research and make sure the website is legitimate.

Source: NZ Police

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