Popular grant scams target veterans, consumers

ABC7 I-Team Investigation
CHICAGO (WLS) -- There's a new warning about what's known as the grant scam, which federal authorities call "popular" and "persistent."

The grant scam is similar to that IRS scam the I-Team has warned you about previously.

But the grant scam promises a big payoff, but only if you first hand over hundreds of dollars.

Retired Army Captain James Bennett thought he was being awarded a grant for his military service.

"It makes me feel really angry on the inside," said Bennett. "They just said it was a grant for being a good citizen, for being a solider, for paying my taxes. To me, that's very wrong."

Bennett got a call from a Washington, DC, area code that told him he would get a $14,000 federal grant, if he would send the caller $400 dollars in iTunes gift cards.

"I was going to use it for home repairs. I need a fence around my property. I'm trying to get my father to come live with me and he's handicapped. I need some improvements to the house," said Bennett.

After Bennett sent $200 in iTunes gift cards he became suspicious. Police told him that call was most likely from another country.

Once they had those numbers, Bennett's money was gone.

A Chicago-area Better Business Bureau alert said there's been a rash of grant scams.

The Federal Trade Commission said this year alone 4,500 victims filed complaints.

How are people falling for this?

"They will use some name, like we are from the Federal Grants Administration- an agency that doesn't even exist but sounds legitimate. Someone who may not know and the caller ID is spoofed so it will look on the consumer's ID like the person is calling from Washington....might say federal grants," said Todd Kossow, Midwest Region Director of the Federal Trade Commission.

Kossow said most of the grants offered for "home repairs "and "auto repairs" don't even exist and you should never send money to get money.

"And nobody is ever going to call you on the phone and tell you that you have been selected to receive a grant that you didn't apply for. It just doesn't work that way," said Kossow.

In October, the U.S. Department of Justice indicted 61 suspects for what they called various telephone schemes - including the grant scam. Some were arrested in Chicago's suburbs.

"Even though the calls are coming from India, there are often a lot of people in the United States who are assisting... There will be people in the U.S. who are helping to operate the scams, who help to process the payments and things like that," said Kossow.

"I've worked hard for my money: 32 years active duty, continuously, non-stop. I've worked hard to live a decent life. And for someone to just step in and try to take away what I've worked so hard for to keep this country free, somebody's got to do something about that. It isn't right," said Bennett.

Even though you should never wire money, some legitimate grants require an application fee.

But most grants are only for education, community work or medical research.

To file a scam report go to www.ftc.gov/complaint or call 1-877-FTC HELP.

For more on legitimate grants to apply for visit: www.grants.gov
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