Canada's anti-fraud squad says it has all but decimated large domestic phone-fraud organizations, extraditing 70 people to face U.S. justice for bilking American victims of their life savings.

But in the face of new threats, the Montreal-based Project COLT unit is about to expand its team as it tackles tech-savvy African-based networks that have masterminded mail fraud on a massive scale while funneling the dirty money to offshore accounts.

RCMP Sgt. Yves Leblanc, an outgoing Project COLT investigator, tells CTV News that among organized criminals the so-called West African syndicates pose the biggest direct threat to Canadians' hard earned cash during this recession.

"This is a massive problem in the world," Sgt. Leblanc said from COLT's downtown office that brings together the Mounties, the SQ, the FBI and other agencies.

"A lot of money is going overseas ... the public doesn't realize how big this problem is."

The Africans work in small groups to send bogus cheques in exchange for victims' cash. Crooks use the banks as well as cash counters in Montreal and other Canadian cities, says Leblanc. He warns people to beware of three main mail-based scams:

  • The Lottery Scam, where you receive a "jackpot cheque" and are asked to pay a tax via wire transfer. The jackpot cheque later bounces.

  • The "Secret shopper" scam where you're sent a cheque and told to deposit it, buy merchandise and keep the change for yourself. You're told to send another portion back to the "survey firm" via wire transfer, unaware that the original cheque will bounce.

  • The "Overpayment scam" whereby you're selling something and you're contacted by a "buyer" who "accidentally" sends you a cheque that's more than your asking price. The buyer apologizes for the mistake and asks you to wire them the difference. Of course, the original cheque is totally bogus.

New Addition

COLT's newest full-time partner is Canada Post, whose mail system is frequently abused by these fraud artists who generate counterfeit postage, send bad cheques and even steal legitimate ones.

The postal service plans to add one of its inspectors to the COLT squad by the end of the month, says spokesman John Caines.

"We're basically dealing with a new breed of criminal out there who will try anything," he said this week from Ottawa.

But mail-fraud investigations can be hampered by Canadian laws that forbid investigators from opening mail. What's more, Caines says tracing a letter back to the crook who sent it isn't easy.

"If it was dropped in Canada, maybe. If it came from overseas, that's more difficult. It's hard to say exactly where it came from."

Canada Post warns people to always be careful about providing confidential personal information, especially banking or credit card details, unless they're certain the company is legitimate.

Greed is bad

Sgt. Leblanc says that in these lean times, too many people are too quick to run to the bank with what seems to be a real cheque without first asking a few basic questions.

"Who ever pays you money, up front, with a cheque?" he says, cautioning people to be wary of anyone who wants quick cash via Western Union or MoneyGram.

These criminal groups pose such a threat to Canadians and law enforcement because they're small, mobile and most of all, savvy.

"These people know the banking system better than we do," says Leblanc.

"It's their job to find loopholes to work around it to use it to their advantage to defraud the system."