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Advance fee fraud
Advance fee fraud, often also known as the Nigerian money
transfer fraud, Nigerian scam or 419 scam after the
relevant section of the Nigerian Criminal Code that it violates[1],
is a
fraudulent scheme to extract money from victims after making them
believe they will get an immense fortune. Victims are requested to pay
an upfront fee before their purported fortune is released.
These scams have come to be associated in the public mind with Nigeria due to
the massive proliferation of such
confidence tricks from that country since the mid-eighties, although they are
often also carried out in other African nations, including Togo, Côte d'Ivoire,
Ghana, Benin, Liberia, Sierra Leone and South Africa, and increasingly from
European cities with large West African populations, notably London, Amsterdam
and Madrid, and lately also Dubai (United Arab Emirates) and even Canada.
Originally, the schemers contacted mainly heads of companies and church
officials. However, the use of
e-mail
spam and
instant messaging for the initial contacts has led to many private citizens
also being targeted, as the cost to the scammers to make initial contact is much
lower.
The United States Federal Trade Commission has issued a consumer alert about
the Nigerian scam. It says: "If you receive an offer via email from someone
claiming to need your help getting money out of Nigeria — or any other country,
for that matter — forward it to the FTC at spam@uce.gov." The United States
Department of the Treasury advises "You may also email the 419er documents,
especially any banking data they may have given you, marked as described above,
to Task Force Main in DC 419.fcd@usss.treas.gov; that is also acceptable."
History
The origin of the 419 scam is currently debated. Many critics believe that
the scam slowly began in Nigeria, possibly developing from earlier forms of
fraud practised by Nigerian petroleum companies, criminal gangs, and government
agencies in the 1970s or 1980s. The modern 419 scam well predated the widespread
use of e-mail, and earlier variants were often sent via fax or even Telex.
Others believe that the scam was a combination of different frauds in the
Igboland region, some hundreds of years old. The first scams involved lucrative
oil contracts and other related frauds. The scam did not employ a significant
number of people until the rise of the Internet. After the turn of the
millennium, the scam proliferated rapidly and employed much more people than it
did in the 1990s. Today, it may employ as many as 250,000 people. Until about
2001, the scammers were located primarily in Lagos, Aba, Owerri, and Port
Harcourt, Nigeria.
Most, though not all, 419 fraudsters are ethnically
Igbo,
the predominant ethnic group of southeast Nigeria. A lot of 419 jargon is Igbo
in origin, and
scambaiters are widely taking advantage of the Igbo language in their
scambaits (such as insulting a scammer in his native language). It is not clear
why the fraud is specifically an Igbo phenomenon, but it may well be one of the
consequences of Igbo oppression in modern Nigerian society. After the Biafran
Civil War in the late 1960s, the Igbo
homeland had been severely ravaged by war, leaving the Igbo people desperately
impoverished. Unemployment and poverty struck hard, making crime a more
lucrative temptation for certain unemployed young men. After the war, many
became employed in the government and petroleum industries, where the 419 scams
had probably sprung up.
Implementation
The 'investors' are contacted, typically with an offer of the type "A rich
person from the needy country needs to discreetly move money abroad, would it be
possible to use your account?". The sums involved are usually in the millions of
dollars, and the investor is promised a large share, often forty percent. The
proposed deal is often presented as a "harmless"
white-collar crime, in order to dissuade participants from later contacting the
authorities. The operation is professionally organized in Nigeria, with offices,
working fax numbers, and often contacts at government offices. The investor who attempts to research the background of the offer will
usually find that all pieces fit perfectly together.
If they then agree to the deal, the other side will first send several
documents bearing official government
stamps, seals etc., and then
introduce delays, such as "in order to transmit the money, we need to bribe a
bank official. Could you help us with a loan?" or "In order for you to be
allowed to be a party to the transaction, you need to have holdings at a
Nigerian bank of $100,000 or more" or similar. More delays and more additional
costs are added, always keeping the promise of an imminent large transfer alive.
Sometimes psychological pressure is added by claiming that the Nigerian side, in
order to pay certain fees, had to sell all belongings and borrow money on their
house.
In any case, the promised money transfer never happens. The money or
gold does not
exist.
The spams are normally sent from
Internet cafes equipped with satellite Internet. The addresses to be sent to
and bodies of the mails copied and pasted from memory sticks into the webmail
interface. Some London-based gangs have been known to use
spamware on
laptops which they surreptitiously connect to the cafe's network, but even this
software is notably out-of-date. While this method is significantly more labour-intensive
per mail sent than others, it offers near-total anonymity and allows them to
very quickly and easily relocate. The often very professional layout of web
pages and so on used in the scams suggests that they do not lack technical
sophistication.
Variants
Invitation to visit the country
Sometimes, victims are invited to a country to meet real or fake government
officials. Some victims that travel are instead held for ransom. In some
rumoured cases they are smuggled into the country without a
visa and then threatened into giving up more money, as the penalties for
being in a foreign country without a visa are severe. In the most extreme cases
the victim is even murdered.[2]
Credit card use through IP Relay
In another variation of the scam, the scammer places calls through IP Relay (www.ip-relay.com),
a federally-funded internet telerelay service for deaf/hard of hearing/speech
disabled individuals. The scammer calls various businesses, attempting to
purchase items with stolen or fraudulent credit cards. Oftentimes, individuals
are targeted as well, most of whom being those who advertise a product or
service online.
Typically, in an IP-Relay scam call, the scammer will place several calls
using a Relay Operator. Calling to businesses or private parties, the scammer
will inquire about merchandise/services offered, and then immediately and with
few questions asked, attempt to purchase the merchandise. The Scammer then
proceeds to ask for an e-mail address, by which he can contact the victim to
proceed with the closing of the fraudulent transaction.
The scammer proceeds to send the victim a counterfeit money order, with
instructions requiring that it be cashed, and that excess funds sent back to the
scammer (advanced fee fraud). When it is determined that the money order is
counterfeit, the victim is usually arrested by the authorities for playing a
role in the scam.
It is worth noting that credit card fraud is not the only kind of fraud
reported through IP Relay. A relay scammer typically will use IP Relay for all
fraudulent-related transactions/telephone calls within the United States. This
includes the "love bug " scam, as detailed below.
Romance angle
A recent variant is a money-for-romance angle. The male or female "victim" is
approached on an Online dating service and becomes interested in a "lady" or
"man" who has attractive pictures posted, generally stolen from online
portfolios of modeling agencies. The offending party claims to be interested in coming to
visit the victim, but needs some cash up front in order to book the plane, hotel
room, and other expenses. In other cases he or she may have just travelled to
Nigeria (for tourism or business) and has been arrested by corrupt officials, or
become ill from eating the local food, and needs an emergency Western Union
transfer to bail or bribe his/her way out. As with other variants, money always
seems to travel to Africa mainly via Western Union, and the "lady" or "man"
always seems to come up with additional reasons for requesting more funds.
Auction overpayment, fake check
In another updated scam, scammer offers to buy some expensive item (eg.,
jewellery or a car, that the prospective victim advertised on eBay, for example,
or legitimate classifieds website) by official, certified, bank or cashier's
check. The check will have an "accidentally" or mutually agreed higher value
than the price of the item, so the scammer asks the victim to wire the extra
money to some third party as soon as the check clears. The check typically
clears after one or two days, but the fact that it is counterfeit is not detected until several days or weeks later, by which time
the victim has sent the item and the "additional money" to the scammer
and his representative. Most banks will hold the victim accountable for the
value of the counterfeit check.
A variation on the eBay scam involves sending a request for payment for an
item that the alleged seller does not own but claims to have sent. Since actual
eBay item numbers are used this has been a nuisance for legitimate sellers.
Fake escrow
Another method is after winning a bid on items on the online auction site
eBay (especially laptops or other consumer electronics), to suggest to use an
escrow service.
However, the escrow service is fake and part of the scam. The victim will send
the laptop or camera to the escrow service, never to hear from the scammer or
escrow service again. The website of the escrow service will typically go
offline after the victim has sent his goods.
In one case the victim knew that the supposed buyer was a scammer and scammed
the scammer. The whole exchange and pictures was extensively documented on the
Something Awful forums.
Lottery scam
Lottery scam involves fake notices of lottery wins. The winner will usually
be asked to send sensitive information to a free email account. This is a form
of advance fee fraud as money in advance is often required and
is also similar to
phishing. A
variant of the scam will appear to be sent by a
lawyer representing the estate of some long-lost relative the victim never knows
he or she had (the victim's surname will be inserted into the e-mail message)
who perished along with his or her family in a car or airplane accident
last April. The scammer will claim to have gone to a lot of trouble to find the
victim in order to give him or her a share of the millions of dollars available
if the victim will forward his or her bank account information to the scammer.
Charity
A more direct variant is found in the fake charity and fake church scams. In
this type of scam the victim is asked to donate or invest in a local (often
West African) charity or church. While no direct monetary benefit is presented
to the victim, these scams are perpetrated by the same scammers that also employ
more traditional advance fee fraud and the scams follow roughly the same modus
operandi as the previously mentioned scams.
Consequences
Monetary loss estimates
Estimates of the total losses due to the scam vary widely. The
Snopes website
lists the following estimate:
- "The Nigerian scam is hugely successful. According to a 1997 newspaper
article: "We have confirmed losses just in the United States of over $100
million in the last 15 months," said Special Agent James Caldwell, of the
Secret Service financial crimes division. "And that's just the ones we know
of. We figure a lot of people don't report them."
[3]
Although the "success rate" of the scam is hard to gauge, some experienced
419 scammers get one or two interested replies for every thousand messages. An
experienced scammer can expect to make several thousand dollars per month
[4].
Ultrascan Advanced Global Investigations, a Netherlands - based firm which
has been studying 419 matters since the mid -1990's, has prepared a table
quantifying 419 operations by country for 2005. These stats are based on
Ultrascan's in-house investigations and include, by nation: number of 419 rings;
number of 419ers; income of the 419ers (the amount of losses by victims to the
419ers); and additional data. 419 Coalition view is that these stats present a
reasonably conservative and realistic look at the extent and magnitude of 419
criminal operations worldwide.
[5]
Since 1995, the United States Secret Service has been (somewhat) involved in
combating these schemes, but they will not investigate unless the monetary loss
is in excess of fifty thousand US Dollars. Very few arrests and prosecutions have been made due to the
international aspect of this crime.
Physical harm or death
Some victims have hired private investigators in Nigeria or have personally
travelled to Nigeria, without ever retrieving their money. One American was
murdered in Nigeria while pursuing his lost money. In February 2003, a scam
victim from the Czech Republic shot and killed an official at the Nigerian embassy.
[6] A Greek man was murdered in South Africa after responding to a 419 scam.
[7] On occasion Americans living in the
Los
Angeles area who stopped sending payments were physically stopped and
threatened by people who had contacts with the scammers.
Arrests
In 2004, fifty-two suspects were arrested in
Amsterdam after an extensive raid. An Internet service provider had noticed the
increased email traffic. Out of these fifty-two none has been jailed or fined to
date, due to lack of evidence. They were released in the week of July 12, 2004.
An entirely phony "Nigerian embassy" was also discovered in Amsterdam; another
allegedly exists in Bangkok.
Reduced Nigerian internet access
Another effect of the scam's proliferation is that ordinary Nigerians are
having their access to the internet hindered. One reporter in Nigeria sent this
in an email to his producers in late 2005:
- "Connecting a lap top in a cybercafe [in Nigeria] is a nightmare.
Because of the 419 scam, cybercafe operators are reluctant to connect
peoples lap tops. The few who do have to make some settings to your lap top
and most often it would not work."
Legitimate Nigerian businesses are also finding their e-mails increasingly
fail to reach their targets, due to people and companies setting their e-mail
clients to automatically mark all mail containing the words 'Nigeria' and
'Nigerian' or coming from Nigerian
IP
addresses as
spam, or even delete it out of hand.
Sample scam letter
Here is an example of a typical email message which attempts to attract
victims:
From: "BIBI LUCKY" <bibialora1@example.net.ng>
Subject:
Date: Thu, 28 Mar 2002 15:03:44 +0100
To: John.Doe@example.com
Reply-To: bibialora1@example.com
Dear Sir,
ASSISTANCE REQUIRED FOR ACQUISITION OF ESTATE
I write to inform you of my desire to acquire estates
or landed properties in your country on behalf of the
Director of Contracts and Finance Allocations of the
Federal Ministry of Works and Housing in Nigeria.
Considering his very strategic and influential
position, he would want the transaction to be as
strictly confidential as possible. He further wants
his identity to remain undisclosed at least for now,
until the completion of the transaction. Hence our
desire to have an overseas agent.
I have therefore been directed to inquire if you would
agree to act as our overseas agent in order to
actualize this transaction.
The deal, in brief, is that the funds with which we
intend to carry out our proposed investments in your
country is presently in a coded account at the
Nigerian Apex Bank (i.e. the Central Bank of Nigeria)
and we need your assistance to transfer the funds to
your country in a convenient bank account that will be
provided by you before we can put the funds into use in
your country. For this, you shall be
considered to have executed a contract for the Federal
Ministry of Works and Housing in Nigeria for which
payment should be effected to you by the Ministry, The
contract sum of which shall run into US$26.4 Million,
of which your share shall be 30% if you agree to be
our overseas agent.
As soon as payment is effected, and the amount
mentioned above is successfully transferred into your
account, we intend to use our own share in acquiring
some estates abroad. For this too you shall also serve
as our agent.
In the light of this, I would like you to forward to
me the following information:
1. Your company name and address if any
2. Your personal fax number
3. Your personal telephone number for easy
communication.
You are requested to communicate your acceptance of
this proposal through my above stated email address
after which we shall discuss in details the modalities
for seeing this transaction through.
Your quick response will be highly appreciated. Thank
you in anticipation of your cooperation.
Yours faithfully,
BIBI LUCKY.
Other examples of Nigerian scam emails can be seen on the
CIAC Hoaxbusters web site.
Proposed legislation
As a result of the fraud,
Nigeria is
drafting legislation to make spamming a criminal offence punishable with a fine
up to £2,000GBP and
three years in jail
[8].
Terms
- Akwukwo, chekere or pepper: fake check.
- Bill: the amount a scammer plans to extract from his victim.
- Ego: money
- Fall mugu (to): to be fooled, to become victim of advance fee
fraud.
- Flash of account: Causing the victim's bank account to
temporarily show a large credit. This is intended to induce the victim to
believe in the deal and send money. The credit gets reversed by the bank
when it is discovered that the original check or electronic transfer was
fraudulent.
- Format: The scheme or script of an advance fee fraud, e.g., the
late dictator format (the scammer pretends to be a relative of a dictator,
e.g. Miriam Abacha, "daughter" of
Sani
Abacha), the next of kin format, the lottery format.
- Guyman, guy: scammer engaged in advance fee fraud.
- Maga, mugu, mugun, mahi, mahee,
mayi or mayee: victim of advance fee fraud.
- Oga: boss
- Owner of the job or Catcher: Scammer who makes the first
contact with a victim and then passes him on to another scammer who finishes
the job. The latter shares the spoil with the former.
- Wash wash: a "money cleaning" scam involving a huge amount of
black papers (purportedly $100
USD bank notes covered by a black film to sneak them off the custom
officers) that is showed to the victim, who is then requested to pay for
“expensive chemicals” to cleanse the bills.
See also
External links
- Databases
-
urgentmessage.org The website collects and analyzes 419 opening emails
and allows users to view the tangled relations between scam schemes and
authors via clickable graphs.
-
Artists Against 419. Provides a database of faked bank websites. These
websites are used in 419 scams to convince a victim that the promised monies
are real.
-
Scamdex A Searchable, Indexed database of email scams, phishing,
lotteries and Advance Fee Fraud (419) scams.
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