Ransom, International Business and the Obama Administration

cross border business kidnap ransom

Doing business overseas has inherent risks as underscored in current events this week



Yesterday President Obama’s chief counter terrorism advisor Lisa Monaco announced over 30 Americans are being held hostage abroad. While the U.S. government approach remains on a “no concessions” policy, the decision was made to “communicate” with terrorist groups. According to the new White House policy families won’t face prosecution it they pay ransoms.

President Obama said “No family of an American hostage has ever been prosecuted for paying ransom for their loved one. The last thing we should ever do is to add to a family’s pain with threats like that,” he went on to say “The bottom line is this: When it comes to how our government works to recover hostages, we are changing how we do business,”  Futhermore he stated “to deny hostage-takers the benefits of ransom, prisoner releases, policy changes, or other acts of concession. This underscores the risk of Americans doing cross border business overseas and it’s not only in the most votatile regions of the world.

Let’s examine the issue and potential remedies.  

What is a Virtual Kidnapping?

It was shortly after daybreak in Mexico’s Tamaulipas State, when the salesman’s mobile rang. The caller said he was being watched by the notorious drug cartel, Las Zetas and was in imminent danger. He was ordered to leave his phone in the hotel room and head to his car to pick up a different cell. Several threatening calls followed including a demand to move to a different hotel.

Once out of cell phone range and under observation, the criminals contacted his family and demanded an immediate ransom payment or he would be killed. With no choice but to pay, the family deposited $22,000 dollars in an account provided by the criminals. It wasn’t until the salesman wandered back to his hotel none the wiser that the family realised the whole kidnapping was a scam.

Virtual kidnapping is ubiquitous across Latin America, but nothing new. This particular type of crime has been around for over a decade but grown in prominence with the expansion of cell phone technology. It is a psychological kidnapping ruse as the name implies, with a more convincing performance usually earning the criminal group a higher ransom payment. In some cases, the perpetrator calls from a number outside of the country or even a prison cell.  In Mexico, the calls are inmates have employed random continual telemarketing-style cold calling to try to identify responsive victims.

Clearly, this is a relatively uncomplicated scam that requires minimal resources and manpower. It also carries a lower risk of being detected by law enforcement as it is actually an elaborate extortion, not a kidnapping.  The victims rarely come into direct contact with the criminal group, which makes them almost impossible to identify.

The most common victims are local and regional nationals, although foreigners have been targeted in the past. Often the criminals prey on elderly people.  Last year a 70-year old Argentinian woman was convinced to throw money and jewellery off her balcony to secure the release of her husband in Buenos Aires, Argentina. In another case, a group of criminals demanded $8,000 dollars from a retired couple allegedly holding their grandson hostage. He was playing a game of football in a park near Caracas, Venezuela at the time.

Spot the difference

The most noticeable difference between virtual and for-ransom kidnappings is the former is psychological and the latter is physical. So in a virtual kidnapping the target is not physically held captive and is unaware of the scam, which means it is only a matter of hours before the individual makes contact with their dependents or loved ones. With for-ransom kidnappings, the physical captivity period often spans a few days if not weeks, and the relatives or organization will demand a proof of life to make sure the victim is still alive and in the possession of those they are talking to.

Another common distinction is the ransom demand. With virtual kidnappings, the criminals employ homespun methods and have few resources to sustain the scam. Subsequently, there is a necessity to use volatile threatening language to compel a quicker ransom payment before the ruse is exposed. The criminals are usually more responsive to a lower ransom payment, which in many cases recorded by Unity, can be in the low tens of thousands. Conversely, the regional average ransom payment for kidnap and ransom is between $50,000 – $100,000 dollars.

Due to the high volume and frequency of these kidnappings, criminal groups are still hauling in hundreds of thousands of dollars. For example, a virtual kidnapping gang was dismantled in Veracruz, eastern Mexico in 2014. Despite lower earnings, the group still netted approximately half a million dollars before the authorities arrested them.

Next- More Tactics and Techniques


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