Sunday, June 8, 2014

Tip of the Day: Nigerian 419 Scams

One of the most prevalent forms of fraud directed at foreigners is the Nigerian 419 scam; the number comes from the section of the Nigerian criminal code that addresses such fraudulent schemes.

These scams have victimized thousands of foreigners, including successful senior business executives. 

One such scam is described as the advance fee fraud (AFF). Potential victims are convinced that they have been selected to share in multimillion-dollar windfall profits for doing virtually nothing. 

AFF scams often begin with a letter, a fax, an e-mail or a telephone call from a person purporting to be an official in Nigeria or another African country. The main content of the call appears (at first glance) to be a legitimate proposal for transfer of a huge sum of money from one account to another. 

In the notification, the sender informs the recipient that he is seeking a reputable foreign company or individual into whose account he can deposit funds ranging from $10 to $60 million that the Nigerian government overpaid on some procurement contract.

Initially, the target victim is instructed to provide company letterheads and pro forma invoicing that will be used to show completion of the contract. 

One reason for the request is to use the victim’s letterhead to forge letters of recommendation to other victim companies. The victim is told that the completed contracts will be submitted for him or her.

Indications are that AFF grosses hundreds of millions of dollars annually. In all likelihood, some victims do not report their losses to authorities because of fear or embarrassment.

For additional information, refer to the US Department of State publication entitled Nigerian Advance Fee Fraud (http://www.state.gov/regions/africa/naffpub.pdf).

In many cases, victims of these scams are invited to Nigeria or other African countries to meet real or bogus government officials. Some victims who do travel are instead held for ransom. 

In some cases, victims have even been smuggled into the country without a visa and threatened into giving up more money. The penalties for being in a foreign country without a visa can be severe. 

Some specific cases involving Nigerian fraud highlight the severity and desperation that result.  Examples include:

1. Danut Tetrescu, a Romanian who flew from Bucharest to Johannesburg to meet with con- men in the Soweto area of Johannesburg, was kidnapped in 1999 and held for $500,000;

2. Mary Winkler, who was sentenced to 210 days in prison for voluntary manslaughter in the shooting death of her pastor husband in Tennessee, was defrauded of $17,500 in a 419 scam in 2006; and

3. A bookkeeper for a Michigan law firm in 2002 emptied the company bank account of $2.1 million in expectation of a $4.5-million payout from a 419 scam.

The Financial Crimes Division of the US Secret Service receives daily approximately 100 telephone calls from victims/potential victims and 300–500 pieces of 419-related correspondence. 

If you have already lost funds or feel you may be a potential victim of the above scheme, please contact your local US Secret Service field office in the United States or overseas (http://www.secretservice.gov) or the US Department of State Regional Security Officer (http://www.osac.gov/posts). 

If you have received communication asking you to participate in one of these scams, but have not lost any money, forward the letter or e-mail immediately to:

419.fcd@usss.treas.gov or fax it to (202) 406-6930.