Advance-fee fraud

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An advance fee fraud is a confidence trick in which the target is persuaded to advance relatively small sums of money in the hope of realizing a much larger gain.^[1] Among the variations on this type of scam, are the Nigerian Letter (419 fraud, Nigerian scam or Nigerian money offer^[2])^[3], the Spanish Prisoner, as well as Russian/Ukrainian scam (also extremely widespread, though far less popular than the latter). Both the so-called Russian and Nigerian scams stand for wholly dissimilar organised crime traditions, they therefore tend to use altogether different breeds of approaches.

The 419 scam originated in the early 1980s as the oil-based Nigerian economy declined. Several unemployed university students first used this scam as a means of manipulating business visitors interested in shady deals in the Nigerian oil sector before targeting businessmen in the west, and later the wider population. Scammers in the early-to-mid 1990s targeted companies, sending scam messages via letter^[4], fax, or Telex.^[5] The spread of email and easy access to email-harvesting software made the cost of sending scam letters through the Internet inexpensive. In the 2000s, the 419 scam has spurred imitations from other locations in Africa, Asia and Eastern Europe.

The number "419" refers to the article of the Nigerian Criminal Code (part of Chapter 38: "Obtaining Property by false pretences; Cheating") dealing with fraud.^[6] The American Dialect Society has traced the term "419 fraud" back to 1992.^[7]

The advance-fee fraud is similar to a much older scam known as the Spanish Prisoner scam^[8] in which the trickster would tell the scam victim that a (fictitious) rich prisoner had promised to share (non-existent) treasure with the victim if the latter would send money to bribe the prison guards.

Insa Nolte, a lecturer of University of Birmingham's African Studies Department, stated that "The availability of e-mail helped to transform a local form of fraud into one of Nigeria's most important export industries." ^[9]

Embassies and other organizations warn visitors to various countries about 419. Countries in West Africa with warnings cited include Nigeria^[8][10], Ghana^[11][12], Benin^[13], Côte d'Ivoire (Ivory Coast)^[14], Togo^[15][16], Senegal^[17] and Burkina Faso.^[18] Countries outside of West Africa with 419 warnings cited include South Africa^[16][19], Spain^[19], and The Netherlands.^[20]

Contents 1 Implementation 2 Common elements 2.1 Fake cheques 2.2 Wire transfer 2.3 Anonymous communication 2.3.1 Web-based e-mail 2.3.2 E-mail hijacking/friend scams 2.3.3 Fax transmissions 2.3.4 Telecommunications Relay Services 2.4 Fake websites 2.5 Invitation to visit the country 3 Variants 3.1 Cheque cashing 3.2 Romance angle 3.3 Classified ad scams 3.3.1 Scammer is buyer 3.3.2 Scammer is seller 3.4 Lottery scam 3.5 Hitman 3.6 Bomb scams 3.7 Charity scams 3.8 Death in the family scams 3.9 Fraud recovery scams 4 Consequences 4.1 Monetary loss estimates 4.2 Physical harm or death 4.2.1 Kidnapping 4.2.2 Murder 4.3 Emotional harm 4.4 Arrests 4.5 The victim becomes a criminal 5 Terms used by 419-scammers 6 Media references and resources 6.1 Danny Wallace 6.2 The Chaser's War On Everything 6.3 The Office 6.4 30 Rock 6.5 To Catch a Con Man 6.6 Næturvaktin 6.7 "Fonejacker" 6.8 Books 7 See also 8 References 9 External links

[edit] Implementation

This scam usually begins with a form-letter e-mail^[8] sent to many target recipients making an offer that will ultimately result in a large payoff for the intended victim. The stories behind the offers vary, but the standard plot is that a person or government entity is in possession of a large amount of money or gold. This person, for myriad reasons, either cannot access the wealth directly or is no longer in need of it. Such people, who are either real but impersonated people or fictional characters played by the scammer, could include the wife of a deposed African or Indonesian leader or dictator, a terminally ill wealthy person, a wealthy foreigner who had deposited money in the bank just before dying in a plane crash (leaving no will or known next of kin)^[21], a U.S. soldier who has stumbled upon a hidden cache of gold in Iraq, a business being audited by the government, a disgruntled worker or corrupt government official who has embezzled funds, a refugee^[22], and similar characters. The money could be in the form of gold bullion, gold dust, money in a bank account, so-called "blood diamonds", a series of cheques or bank drafts, and so forth. The sums involved are usually in the millions of dollars, and the investor is promised a large share, often forty percent or more, if they will assist the scam character in retrieving the money from holding and/or dispense of it according to the scam character's wishes. The proposed deal is often presented as a "harmless" white-collar crime, in order to dissuade participants from later contacting the authorities. Whilst most recipients do not respond to these emails, scammers are able to gain victims through sheer volume of messages.

Many operations are professionally organized in Nigeria, with offices, working fax numbers, and often contacts at government offices. The victim who attempts to research the background of the offer will often find that all pieces fit perfectly together. Such scammers can often lure wealthy investors, investment groups, or other business entities into scams resulting in multi-million dollar losses. However, many scammers are part of less organized gangs or are operating independently; such scammers have reduced access to the above connections and thus have little success with wealthier investors or business entities attempting to research them, but are still convincing to middle-class individuals and small businesses, and can bilk hundreds of thousands of dollars from such victims.

If the victim agrees to the deal, the other side will often send one or more false documents bearing official government stamps, and seals. 419 scammers often mention false addresses and use photographs taken from the internet or from magazines to falsely represent themselves. Often a photograph used by a scammer is not of any person involved in the scheme. Multiple "people" involved in schemes are fictitious; the author of the "WEST AFRICAN ADVANCE FEE SCAMS" article posted on the website of the Embassy of the United States in Abidjan, Côte d'Ivoire believes that in many cases one person controls many fictitious personas used in scams.^[14]

A scammer will introduce a delay or monetary hurdle that prevents the deal from occurring as planned, 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, convincing the victim that the money they are currently paying will be covered several times over by the payoff. 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, or by pointing out the different salary scale and living conditions in Africa compared to the West. Much of the time, however, the needed psychological pressure is self-applied; once the victims have put money in toward the payoff, they feel they have a vested interest in seeing the "deal" through. Some victims believe that they can cheat the con artist.^[14]

The essential fact in all advance fee fraud operations is that the promised money transfer never happens because the money or gold does not exist. The perpetrators rely on the fact that, by the time the victim realizes this (often only after being confronted by a third party who has noticed the transactions or conversation and recognized the scam), the victim may have sent thousands of dollars of their own money, and sometimes thousands or millions more that has been borrowed or stolen, to the scammer via an untraceable and/or irreversible means such as wire transfer.^[14]

The spam e-mails perpetrating these scams are often sent from Internet cafés equipped with satellite Internet. Recipient addresses and email content are copied and pasted into a webmail interface using a standalone storage medium, such as a memory card. Many areas of Lagos, such as Festac, contain many shady cyber cafés that serve scammers; many cyber cafés seal their doors during afterhours, such as from 10:30 PM to 7:00 AM, so that scammers inside may work without fear of discovery^[23].

Nigeria also contains many businesses that provide false documents used in scams; after a scam involving a forged signature of Nigerian President Olusegun Obasanjo in summer 2005, Nigerian authorities raided a market in the Oluwole section of Lagos. The police seized thousands of Nigerian and non-Nigerian passports, 10,000 blank British Airways boarding passes, 10,000 United States money orders, customs documents, false university certificates, 500 printing plates, and 500 computers^[23].

During the courses of many schemes, scammers ask victims to supply bank account information. Usually this is a "test" devised by the scammer to gauge the victim's gullibility.^[20]

Scammers often request that payments be made using a wire transfer service like Western Union and Moneygram. The reason given by the scammer will usually relate to the speed at which the payment can be received and processed, allowing quick release of the supposed payoff. The real reason is that wire transfers and similar methods of payment are irreversible, untraceable and, because identification beyond knowledge of the details of the transaction is often not required, completely anonymous.^[14]

Telephone numbers used by scammers tend to come from mobile phones. In Côte d'Ivoire (Ivory Coast) a scammer may purchase an inexpensive mobile phone and a pre-paid SIM card without submitting subscriber information. If the scammers believed they are being traced, they throw their mobile phones into wastebaskets and purchase new mobile phones.^[14]

In Benin Nigerians operate scams with Beninese cooperating in the schemes.^[13]

Some crime syndicates employ fraudsters in the United States who conclude "deals" or threaten victims who try to leave deals.^[24][25]

[edit] Common elements

[edit] Fake cheques

Fraudulent cheques and money orders are key elements in many advance fee scams, such as auction/classified listing overpayment, lottery scams, inheritance scams, etc, and can be used in almost any scam when a "payment" to the victim is required to gain, regain or further solidify the victims' trust and confidence in the validity of the scheme.

The use of cheques in a scam hinges on a U.S. law (and common practice in other countries) concerning cheques: when an account holder presents a cheque for deposit or to cash, the bank must (or in other countries, usually) make the funds available to the account holder within 1-5 business days, regardless of how long it actually takes for the cheque to clear and funds to be transferred from the issuing bank^[26]. The cheque clearing process normally takes 7-10 days and can in fact take up to a month when dealing with foreign banks. The time between the funds appearing as available to the account holder and the cheque clearing is known as the "float", during which time the bank could technically be said to have floated a loan to the account holder to be covered with the funds from the bank clearing the cheque.

The cheque given to the victim is typically counterfeit but drawn on a real account with real funds in it. With a piece of software like QuickBooks and/or pre-printed blank cheque stock, using the correct banking information, the scammer can easily print a cheque that is absolutely genuine-looking, passes all counterfeit tests, and may even clear the paying account if the account information is accurate and the funds are available. However, whether it clears or not, it will eventually become apparent either to the bank or the account holder that the cheque is a forgery. This can be as little as three days after the funds are available if the bank supposedly covering the cheque discovers the cheque information is invalid, or it could take months for a business or individual to notice the fraudulent draft on their account. It has been suggested that in some cases the cheque IS genuine - however the fraudster has a friend (or bribes an official) at the paying bank to CLAIM it is a fake weeks or even months later when the physical cheque arrives back at the paying bank.

Regardless of the amount of time involved, once the cashing bank is alerted that the cheque is fraudulent, the transaction is reversed and the money removed from the victim's account. In many cases, this puts victims in debt to their banks as the victim has usually sent a large portion of the cheque by some non-reversible 'wire transfer' means (typically Western Union) to the scammer. Some victims have even been prosecuted for fraud in the scammer's stead, the argument being that the victim "should have known better" than to participate in such a scheme, and thus was a willing conspirator in the fraud.

[edit] Wire transfer

A central element of advance fee fraud is that the transaction from the victim to the scammer must be untraceable and irreversible. Otherwise, the victim, once they become aware of the scam, can successfully retrieve their money and/or alert officials who can track the accounts used by the scammer.

Wire transfers via Western Union are ideal for this purpose. The wire transfer, if sent internationally, cannot be cancelled or reversed, and the person receiving the money cannot be tracked. In fact, said person often does not have to provide identification; they only have to know the identifiers of the transaction such as the control number and secret question. Thus, the overwhelming majority of scams involve making payment via wire transfer. Other similar uncancellable forms of payment include postal money orders and cashier's cheques, but as wire transfer is the fastest method, it is the most common.

[edit] Anonymous communication

Since the scammer's operations must be untraceable to avoid identification, and because the scammer is often impersonating someone else, any communication between the scammer and his victim must be done though channels that hide the scammer's true identity. The following options in particular are widely used.

[edit] Web-based e-mail

Because many free e-mail services do not require valid identifying information, and also allow communication with many victims in a short span of time, they are the preferred method of communication for scammers. Some services go so far as to mask the sender's source IP address, making the scammer completely untraceable even to country of origin.

These services, when notified of an address being used illegitimately, are generally quick to suspend the account. However because a scammer can create as many accounts as he or she wishes and often has several active at one time, finding and shutting down scammer accounts presents only a minor hindrance to scammer operations.

[edit] E-mail hijacking/friend scams

Some fraudsters hijack existing e-mail accounts and use them for advance fee fraud purposes. The fraudsters e-mail associates, friends, and/or family members of the legitimate account owner in an attempt to defraud them.^[27] This ruse generally requires the use of phishing or keylogger computer viruses to gain login information for the e-mail address.

[edit] Fax transmissions

Facsimile machines are commonly used tools of business, whenever a client requires a hard copy of a document. They can also be simulated using web services, and made untraceable by the use of prepaid phones connected to mobile fax machines or by use of a public fax machine such as one owned by a document processing business like Kinko's. Thus, scammers posing as business entities often use fax transmissions as an anonymous form of communication. This is more expensive, as the prepaid phone and fax equipment will cost more than a free e-mail service, but the end result to a skeptical victim can be more believable and thus make faxes worth the added cost.

[edit] Telecommunications Relay Services

Many scams use telephone calls to convince the victim that the person on the other end of the deal is a real person and telling the truth. The scammer, possibly impersonating a U.S. citizen or other person of a nationality - or even gender - other than his or her own, would arouse suspicion by placing an ordinary voice call to the victim. In these cases, scammers use TRS, a US federally-funded relay service where an operator or a text/speech translation program acts as an intermediary between someone using an ordinary telephone and a deaf caller using TDD or other TeleType device. The scammer might specify they are deaf or not, and that their use of a phone requires the use of a relay service. The victim, possibly drawn in by a sense of sympathy for the caller in light of a stated disability, might be more inclined to agree to the fraudulent arrangement.

Because of current FCC regulations and confidentiality laws, operators are required to relay every call verbatim and must adhere to a strict code of confidentiality and ethics. Thus no relay operator is permitted to make judgements about the legality and/or legitimacy of any relay call and must relay the call without interference. As such, the relay operator cannot warn victims even when they suspect that the call is a scam; some sources claim that up to half of all IP Relay calls are scams.^[28]

Due to the relative ease at tracking phone-based relay services, scammers have a tendency to use Internet Protocol-based relay services such as IP Relay to place these calls. A common strategy consists of binding their overseas IP address to a router or server located on US soil, thus allowing them to use US-based relay service providers without interference.

TRS is sometimes used to relay credit card information for the purposes of making a fraudulent purchase with a stolen credit card. In many cases however, it is simply a means for the scammer to further lure the victim into the scam.

[edit] Fake websites

Though 419 scams are often perpetrated by e-mail alone, some scammers enhance the believability of their offer through the use of a sham website. Such websites can imitate real sites such as eBay, PayPal or a banking site like Bank of America for the purposes of phishing, while others are totally fictional and used to lend credibility to a scammer's story. Though phishing is only a secondary interest of most scam operations, as the object of the scammer is to deceive the victim into sending the money through legitimate means, the use of websites for advance fee fraud is common. For instance, a scammer may create a website for a fictional bank, then give the victim details to login to the site, where the victim then sees the money that the scammer has promised sitting in the account. The victim is then more likely to believe the scammer and send the requested advance payments. Fake (or hijacked) websites are the centerpiece of false online storefront scams.

Another twist on scamming is where links are provided to real news sites covering events the scammer says are relevant to the transaction they propose. For instance, a scammer may use news of the death of a prominent government official as a backstory for a scam involving getting millions of dollars of the slain official's money out of the country. These are real websites covering legitimate news, but the scammer is usually not connected in any way with the events reported, and is simply using the story to gain the victim's sympathy.

[edit] Invitation to visit the country

Sometimes, victims are invited to a country to meet real or fake government officials. Some victims who do travel are instead held for ransom. In some rumored 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.^[29] Sometimes victims are ransomed or killed.^[30][31]

[edit] Variants

There are many variations on the most common stories, and also many variations on the way the scam works. The following are notable deviations from the standard Nigerian Letter scam, but still retain the core elements; the victim is deceived by some disproportionately large gain into sending an advance payment, which once made is irrecoverable.

[edit] Cheque cashing

Some schemes are based solely on conning the victim into cashing fake cheques. The scammer will contact the victim to interest them in a "work-at-home" opportunity, or asking them to cash a cheque or money order that for some reason cannot be redeemed locally. A recently-used cover story is that the scammer wishes the victim to work as a "mystery shopper", evaluating the service provided by MoneyGram or Western Union locations within major retailers such as Wal-Mart ^[32]. The scammer sends the victim a cheque or money order, the victim cashes it, sends the cash to the scammer via wire transfer, and the scammer disappears. Later the forgery is discovered and the bank transaction is reversed, leaving the victim liable for the balance. Schemes based solely on cheque cashing will usually offer only a small part of the cheque's total amount, with the assurance that many more cheques will follow; if the victim buys in to the scam and cashes all the cheques, the scammer can win big in a very short period of time. Other scams such as overpayment usually result in smaller payoffs for the scammer, but have a higher success rate as the scammer's request seems more believable.

Some cheque-cashing scammers use multiple victims at multiple stages of the scam. A victim in the U.S. or other "safe" country such as the U.K. or Canada (often the country in which the cashing victim resides) is sometimes approached with an offer to fill out cheques sent to them by the scammer and mail them to other victims who will cash the cheque and wire the money to the scammer. The cheque mailer is usually promised a cut of the money from the scammer; this usually never occurs, and in fact the cheque mailer is often conned into paying for the production and shipping costs of the cheques. The cheque information has either been stolen or fictionalized and the cheques forged. The victim mailing the cheque is usually far easier to track (and prosecute) than the scammer, so when the cheques turn up as fraudulent, the one mailing them usually ends up not only facing federal bank fraud and conspiracy charges, but liability for the full amount of the fraudulent cheques. Because the cheque mailer is taking the fall, the scammer is even less likely to be caught, which makes it a popular variation of the scam for scammers in nations with tougher anti-fraud laws.

[edit] Romance angle

Main article: Romance scam

A recent variant is the "Romance Scam" which is a money-for-romance angle. The victim is usually approached by the scammer on an online dating service, on an Instant messenger (like Yahoo IM) or even social networking sites. The scammer claims to have become interested in the victim, and have pictures posted of an attractive person who is not actually the poster. The scammer uses this communication to gain the victim's confidence, and then ask for money. The offending party may claim to be interested in meeting the victim, but needs some cash up front in order to book the plane, hotel room, and other expenses. In other cases, they may claim they're trapped in a foreign country and need assistance to return, to escape imprisonment by corrupt local officials, to pay for medical expenses due to an illness contracted abroad, and so on. The scammer may also use the confidence gained by the romance angle to introduce some variant of the original Nigerian Letter scheme, such as saying they need to get money or valuables out of the country and offer to share the wealth, making the request for help in leaving the country even more attractive to the victim. A newer version of the scam is to claim to have 'information' about the fidelity of a person's significant other which they will share for a fee. This information is garnered through social networking sites by using search parameters such as 'In a relationship' or 'Married'. Anonymous emails are first sent to attempt to verify receipt, then a new web based email account is sent along with directions on how to retrieve the information.

[edit] Classified ad scams

[edit] Scammer is buyer

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Related to check cashing scams, the scammer will contact the seller of a listed item or service on eBay, Craigslist or other classified ad site, and offer to buy the item or hire the lister's services. The scam then plays one of two ways.

In an overpayment scam, the scammer will send a check or money order that is far larger than the agreed-upon price of the item, telling the seller to deduct any packing or shipping costs incurred, then refund him the remainder (which could be several hundred or even thousand dollars more) using a wire transfer service. This wire transfer is an advance fee similar to check cashing scams; the payment note is a forgery, and once discovered the victim has lost both the item and the amount of the overpayment.

The second method is a cancellation; after the victim receives and deposits the fraudulent check, the scammer cancels the transaction and demands their money back immediately, often by inventing some sort of personal catastrophe to gain the victim's sympathy. The scammer may also threaten to leave negative feedback about the victim on sites like eBay. The victim then refunds the entire balance of the check by wire transfer, and as before is eventually made to repay the amount of the fake check to the bank. This type of scam is sometimes performed using PayPal - eBay's payment subsidiary. The scammer will send a payment via PayPal, then contest the transaction and attempt to have PayPal's investigators reverse it.

The overpayment scam has evolved considerably over time. Originally the scammer contacted sellers of items valuable to the scammer, such as items that can be resold on the black market (such as jewelry), would personally benefit the scammer (such as consumer electronics like HDTVs and stereo equipment), or could be used in further scams (such as laptops, portable storage devices, printers, cameras and scanners). However, the intent of scammers has largely changed from acquiring the item to getting the money. This may have been influenced by the growing awareness of this scam in online communities, resulting in sellers refusing to ship an item internationally. Currently, if the advertisement is an item for sale, the scam is usually run using a "drop"; the item is sent to a third party in the scam, who is often a scam victim themselves being manipulated into receiving packages for the scammer. This third party may forward a package (at their own expense) that is of high value to the scammer, or could be instructed to sell the item to a pawn shop or through a classified ad and forward the money, but most often they are told simply to hold the packages indefinitely.

[edit] Scammer is seller

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A scammer will advertise an item for sale (usually high-end consumer electronics such as digital cameras, laptop computers, plasma TVs, video game consoles, or cell phones) at a very low cost (usually about 1/3 of the normal retail price). The body of the listing always instructs buyers to contact the seller directly, outside of any controlled communication in place on the site, using a Yahoo or Hotmail e-mail account. When contact is made, the seller insists that the buyer send money by Money Gram, usually giving a series of excuses for why they will not accept payment via a secured means such as Western Union or Paypal. If asked why the price is so low, the scammer will usually cite that he has a business and accidentally overstocked the item, thus needing to sell his products before they depreciate below wholesale prices. If the money is sent to a foreign country, it is gone forever, and the product is never shipped. The phony seller sometimes boosts credibility by using a legitimate user account to list the item. The account has been hijacked from a legitimate seller with good feedback, usually by means of e-mail phishing. Alternatively, the false seller will sometimes buy many items at nominal value in order to receive many months of good feedback, before advertising the scam items.

Though the scam often involves Money Gram or other irreversible methods of payment, even "zero liability" forms of payment such as PayPal can be used to maintain confidence in the transaction. Regardless of whether the money lost in the scam is refunded to the victim under fraud protection guarantees, the scammer has taken the money in cash and disappeared, in such cases making the payment service the end victim.

The scammer will sometimes offer a service, such as a room for rent, or an animal or pet. These variants usually evolve into traditional advance fee fraud, where the scammer will invent one fictional cost or fee after another relating to the transaction and attempt to collect, but can also accept a payment and disappear similar to offers of tangible goods. The scammer can also offer a job; such a scam either evolves into a check cashing scam, or the scammer will invent fees and other startup costs similarly to the basic Nigerian scam.

[edit] Lottery scam

Main article: Lottery scam

The lottery scam involves fake notices of lottery wins. The winner will usually be asked to send sensitive information to a free email account. The scammer will then notify the victim that in order to release the funds, some small fee (insurance, registration, or shipping) is required. Once the fee has been sent, the scammer will invent another fee and attempt to collect it.

Much like the various forms of overpayment fraud detailed above, a new variant of the lottery scam involves fake or stolen cheques being sent to the 'winner' of the lottery (these cheques representing a part payment of the winnings). The winner will then be more likely to assume that the win is legitimate and subsequently more likely to send the fee (which he does not realize is an advance fee). The cheque, and associated funds, will then be flagged by the bank when the fraud is discovered and debited from the victim's account.

In 2004 a variant of the lottery scam appeared in the United States. Fraud artists using the scheme call victims on telephones; a scammer tells a victim that a government has given him or her a grant and that he or she needs to pay an advance fee, usually around 250 United States dollars, in order to receive the grant.^[33]

[edit] Hitman

An e-mail is sent to the victim's inbox, supposedly from a hitman who has been hired by a "close friend" of the recipient to kill him or her but will call off the hit in exchange for a large sum of money. This is usually backed up with a warning not to contact the local police or FBI, or the "hitman" will be forced to go through with the plan.^[34][29] This is less an advance fee fraud and more outright extortion, but a reward can sometimes be offered in the form of the "hitman" offering to kill the man who ordered the original hit on the victim.

[edit] Bomb scams

Related to the hitman scam, the scammer will contact a business, mall, office building or other commercial location with a bomb threat. The scammer says they will detonate the bomb unless the management of the business does as the scammer tells them. Often, the scammer says that they have the store under surveillance; however, analysis of the calls by police have established that the vast majority of threat calls are made from other states or even from outside the country. Some evidence exists that points to the scammers hacking into the store's surveillance network, but this has not been confirmed in any case and has been refuted in others.^[35] The scammer usually demands that the store management or people in the headquarters office of the store (if the store is a chain) send money via wire transfer to the scammer to spare the store and the people in it. Other demands of these scammers have been more personal and humiliating, such as demanding that everyone in the store disrobe.^[35]

Because the underlying threat in the scam is a bomb threat, local law enforcement very quickly responds to the site under threat; however, because the scammer is usually nowhere near this location, the scammer is in little if any danger of being apprehended while the scam is playing out. Law enforcement, in the meantime, cannot assume the threat is anything but genuine, and therefore can do little to intervene without risking the detonation of the bomb. The fact that the threat was in reality a scam has usually not been discovered until long after the situation is over—and the extortionist has collected the money demanded.

[edit] Charity scams

The scammer poses as a charitable organization soliciting donations to help the victims of a natural disaster, terrorist attack (such as the Sept. 11 World Trade Center attack), regional conflict, or epidemic. Hurricane Katrina and the 2004 tsunami were popular targets of scammers perpetrating charity scams; other more timeless scam charities purport to be raising money for cancer, AIDS or Ebola virus research, or impersonate charities such as the Red Cross or United Way. The scammer asks for donations, often linking to online news articles to strengthen their story of a funds drive. The scammer's victims are charitable people who believe they are helping a worthy cause and expect nothing in return. Once sent, the money is gone and the scammer often disappears, though many will attempt to keep the scam going by asking for a series of payments. The victim may sometimes find themselves in legal trouble after deducting their supposed donations from their income taxes. United States tax law states that charitable donations are only deductible if made to a qualified non-profit organization^[36]. The scammer may tell the victim their donation is deductible and provide all necessary proof of donation, but the information provided by the scammer is fictional, and if audited, the victim faces stiff penalties as a result of the fraud. Though these scams have some of the highest success rates especially following a major disaster, and are employed by scammers all over the world, the average loss per victim is less than other fraud schemes. This is because, unlike scams involving a large expected payoff, the victim is far less likely to borrow money to donate or donate more than they can spare.

In a related variant, the scammer will pose as a terminally ill mother, poor university student, or other down-on-their-luck person and simply beg the victim for money for college tuition, to sponsor their children, or a similar ruse. The money, they say, will be repaid plus interest by some third party at a later date (often these third parties are some fictitious agency of the Nigerian government, or the scammer themself once a payment from someone else is made available to them). Once the victim starts paying money to the scammer, the scammer will tell the victim that additional money is needed for unforeseen expenses, similar to most other variants; in the case of the ill mother, the children will fall ill as well and require money for a doctor's care and medicine (many scammers go as far as to say that as the sponsor of the children, the victim is legally liable for such costs), where the student might claim that a dormitory fire destroyed everything they own.

[edit] Death in the family scams

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These scams prey on families who have lost loved ones, or who have not been in touch with a loved one for some time. The scammer will obtain obituary information from city morgues, news of a death where the victim has not yet been identified, and/or personal information about a missing person. The scammer will contact victims saying that their loved one has passed away, and the victim is required to pay final medical costs or fees for the release of the body. The scammer may also say that the victim, as the next of kin, is liable for debts incurred by the deceased. This is often a highly personalized scam, but using news of an unidentified victim and a mass e-mail, the scammer can often lure victims who have loved ones in the same city whom the victim cannot get in touch with. The scam's operation is more of an extortion, however the "payoff" could be considered to be the remains of the deceased, and the groups that perpetrate these scams are alleged to be the same groups that perpetrate other advance fee frauds. This scam has also been attempted on families of soldiers fighting in Iraq and Afghanistan by scammers claiming to be agents of the United States Army.

[edit] Fraud recovery scams

This variant targets former victims of scams. The scammer contacts the victim saying that their organization can track and apprehend the scammer and recover the money lost by the victim, for a price. Alternatively, the scammer may say that a fund has been set up by the Nigerian government to compensate victims of 419 fraud, and all that is required is proof of loss (which usually includes personal information) and a processing and handling fee to release the amount of the claim. The scammer is counting on the victim's dire need to recover their lost money, as well as the fact that they have fallen victim before and are therefore susceptible to such scams. Often, these scams are perpetrated by the same scammer who conned the victim in the first place, as an attempt to ensure the scammer gets every penny possible from the victim. Alternately, the original scammer will "sell" a list of the people he has scammed but who have ceased contact to another scammer who runs the recovery scam. Sometimes the scammer impersonates the foremost "fraud related crime-fighters" in Nigeria, the EFCC (Economic and Financial Crimes Commission), which not only adds credibility to the scam, but tarnishes the reputation of the EFCC once this second scam is discovered.^[37][14]

[edit] Consequences

[edit] 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."[8]

”

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. Stephanie Nolen of The Globe and Mail said that an experienced scammer can expect to make at least several thousand dollars per successful scam letter.^[38]

Ultrascan Advanced Global Investigations, a Netherlands-based firm which has been studying 419 matters since the mid-1990s, has prepared a table quantifying 419 operations by country for 2005 and 2006. 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.

Since 1995, the United States Secret Service has been involved in combating these schemes. The organization will not investigate unless the monetary loss is in excess of fifty thousand US Dollars. However, very few arrests and prosecutions have been made due to the international aspect of this crime.

In 2006, a report by a research group concluded that Internet scams in which criminals use information they trick from gullible victims and commonly strip their bank accounts cost the United Kingdom economy £150 million per year, with the average victim losing £31,000.^[39]

[edit] Physical harm or death

• Some victims have hired private investigators in Nigeria or have personally travelled to Nigeria, without ever retrieving their money. There are cases of victims being unable to cope with the losses and committing suicide.^[40] Leslie Fountain, a senior technician at Anglia Polytechnic University in England, set himself on fire after falling victim to a scam; Fountain died of his injuries.^[41] In 2006 an American living in South Africa hanged himself in Togo after being defrauded by a Ghanaian 419 con man.^[42]
• In February 2003, a 72 year-old scam victim from the Czech Republic shot and killed 50-year old Michael Lekara Wayid, an official at the Nigerian embassy in Prague, and injured another person.^{[43][44][45][46]}

[edit] Kidnapping

• On June 2, 1996 in Lomé, Togo, 419 kidnappers held a Swedish businessman for $500,000. Swedish police and the kidnappers negotiated before the kidnappers released the man on June 12, 1996.^[29]
• From September 1995 to April 1997, conmen held at least eight Americans against their will. In 1996 the embassy repatriated ten Americans who fell victim to 419 schemes.^[29]
• Joseph Raca, a former mayor of Northampton, England, was kidnapped by scammers in Johannesburg, South Africa in July 2001. The captors released Raca after they became nervous.^[47]
• 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.^[48]

[edit] Murder

• 29-year old George Makronalli, a Greek man, was murdered in South Africa in December 2004 after responding to a 419 scam.^[30]
• Kjetil Moe, a Norwegian businessman, was reported missing and ultimately killed after a trade with Nigerian scammers in Johannesburg, South Africa (September 1999).^[49]
• One American was murdered in Nigeria in June 1995 after being lured by a 419 scam.^[50] From 1994 to April 1997 419 scammers murdered 15 people in total.^[29]

[edit] Emotional harm

Victims, in addition to having lost tens of thousands of dollars, often also lose their ability to trust. The 419 Eater website says, "Although there is no serious physical injury, many victims of con-men speak of the betrayal as the psychological equivalent of rape". Victims may blame themselves for what has happened, resulting in overwhelming guilt and shame. If the victim has borrowed money from others to pay the scammer, these feelings are magnified. Further compounding the problem is the public opinion of scam letters and scam victims. Scam letters are often viewed as humorously moronic, and the people who fall for them equally so, in complete disregard to the fact that people from all walks of life at every level of education fall for these scams. The victim, having lost money through the scammer's manipulation of payment methods such as money orders or cheques, may become distrustful of the financial system. Scam victims may stop trusting and giving money to churches, legitimate charities and, in the extreme, even service providers such as their electric company because of their requests for money. Some victims commit suicide.^[40][41]

In other cases, the victim will continue to contact the scammer after being shown proof that they are being scammed or even being convicted of crimes relating to the scam, having been drawn so deeply into the web of deception that their trust in what the scammer tells them overrides everything else in their life.^[51] Such victims are easy prey for future scams, digging themselves even deeper into financial and legal trouble.

[edit] Arrests

In 2004, fifty-two suspects were arrested in Amsterdam after an extensive raid.^[52] An Internet service provider had noticed the increased email traffic. None were jailed or fined, due to lack of evidence. They were released in the week of July 12, 2004.

On November 8, 2004, Nick Marinellis of Sydney, Australia, was sentenced to 4 1/3 to 5 1/4 years for sending Nigerian 419 e-mails.^[53]

In October 2006 the Amsterdam police launched Operation Apollo to fight internet fraud scams operated by West Africans and notably Nigerians. Following this investigation police have arrested 80 suspects, most of them from Nigeria, and seized from their homes lists of email addresses, as well as fake documents. On June 16, 2007 111 people were arrested for being in The Netherlands illegally and suspicion of fraud, although their implication with the email scams is yet unknown.^[54]

Authorities in Nigeria have been slow to take action and for many years nothing was done. Nigeria has a reputation for criminals being able to avoid convictions through bribery and rumours abounded of official connivance in the scams.^[55] In 2003 however the Economic and Financial Crimes Commission (EFCC) was charged with tackling the problem.^[56] A couple of success stories including convictions in a large 419 case were reported in 2005.^[57]

[edit] The victim becomes a criminal

Victims of the fraud sometimes fall directly into crime by "borrowing" or stealing money to pay the advanced fees, thinking an early payday is imminent.

• Former Alcona County (Michigan) Treasurer Thomas A. Katona was sentenced to 9-14 years for his embezzlement of more than US$1.2 million in county funds in a Nigerian fraud scheme, which represented 25% of the county's budget for that year.^[58]
• Another example of this was Robert Andrew Street,^[59] a Melbourne-based financial adviser, who fleeced his clients for over AU$1 million which he sent to the scammers in the hope of receiving US$65 million in return. Eventually the Australian Securities and Investments Commission (ASIC) investigated the victim, who had now become a conman himself.
• Another example was a bookkeeper for Michigan law firm ^[60] Olsman Mueller & James who in 2002 emptied the company bank account of US$2.1 million in expectation of a US$4.5 million payout.
• John W. Worley fell for a Nigerian scam and was convicted of taking money under false pretenses. ^[61]
• According to Kurt Eichenwald, author of The Informant, Mark Whitacre defrauded Archer Daniels Midland, a food products manufacturer for which he was a division president, embezzling US$9 million during the same period of time that he was acting as an informant for the FBI in a price fixing scheme that ADM was involved in. His illegal activities in trying to procure funds for payment of his supposed Nigerian benefactors cost him his immunity in the price-fixing scandal, according to Eichenwald's book, The Informant. Eichenwald lost his credibility, his job, and his career in journalism because of lying about his payments to a source in a recent case.^[62][63] James Lieber, author of Rats in the Grain and an attorney, also wrote a book about Whitacre in which he disagreed with Eichenwald's conclusions about Whitacre and the Nigerian scam. ^[64][65][66]

[edit] Terms used by 419-scammers

Fall mugu (to)

To be fooled, to become victim of advance fee fraud.

Flash of account

Cause 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 cheque 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. Maryam Abacha, "Wife" of Sani Abacha), the next of kin format, the lottery format.

Guyman, guy

Scammer engaged in advance fee fraud.

Jokeman

A scambaiter.

Luxcini

An investment scam involving a line of men's luxury clothing based in Beverly Hills, California

Maga, mugu, mugun, mahi, magha^[23], mahee, mayi, mayee, mgbada(antelope)

Victim of advance fee fraud. "Mugu" is Igbo for "fool" and is often used as an insult by scam-baiters referring back to the scammer.

Modalities

commonly used term for methods of funds transfer^[67][3].

Nwachukwu

An advanced fee fraud posing as a Stock Options trading corporation.

Oga or Chairman

Boss

Owner of the job, 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.

Runs

An (illegal) activity.

Yahoo millionaires^[68], yahoo boys ^[69]

Scammers

Yahoo yahoo

The act of scamming, especially through the use of a Yahoo! mail address.

[edit] Media references and resources

[edit] Danny Wallace

In his book, Yes Man, in which for a time he attempted to say 'yes' to every invitation and opportunity, Danny Wallace almost fell for two scams similar to the 419 scam. First, he received an e-mail supposedly from the son of a murdered sultan who wished to seek refuge in the UK. He wanted to forward Wallace his riches and would share them with Wallace when he arrived. Wallace's friend Ian managed to talk him out of it before he went through with it fully, after responding to the e-mail. The second e-mail he received claimed that he had won a lottery in Europe and must go to Holland to claim his winnings. Despite being warned of the risks of going, Wallace went to Holland, although in the end he did not meet the people who claimed to be giving him the money, finding out that one of them was the name of a Dutch supermarket.

[edit] The Chaser's War On Everything

In an episode in Season 1 of the Australian satirical comedy show, The Chaser's War on Everything, Chas Licciardello investigated "spam email" by replying to a spam email received from a Nigerian woman claiming that she was in great danger, and therefore needed to invest her money and diamonds in a trustworthy individual. Chas posed as a man in love with her, and after five emails, was turned away, saying that she did not think he was "serious enough for the transaction".

[edit] The Office

In the episode "Michael's Birthday," from the American version of The Office, Michael Scott references an email he got from the son of the deposed king of Nigeria, an investment on which he lost a lot of money.

[edit] 30 Rock

On the primetime NBC sitcom 30 Rock, the character of Tracy Jordan participates in a "Nigerian Letter" scheme. Played for comic effect, the scheme actually ends up working for Jordan, resulting in an influx of money.

[edit] To Catch a Con Man

Dateline NBC featured advance fee fraud on the premiere of its investigative journalism show To Catch a Predator. To Catch a Con Man explained a typical advance fee fraud scam and featured scammers being scambaited.

[edit] Næturvaktin

In the Icelandic television show Næturvaktin, one of the main characters, Ólafur, gets a letter from "Prince Benjamin" and is taken in by the fraud.

[edit] "Fonejacker"

In the prank call show "Fonejacker" one of the impersonated characters is an African scammer called George Agdgdgwngo.

[edit] Books

Numerous written works about advance fee fraud or the fight against it have been published. These include:

• 419 Scam, ISBN 0-595-85737-X
• Greetings in Jesus Name! - The Scambait Letters ISBN 1905128088
• Scamorama, ISBN 978-1932857382

[edit] See also

• Scam baiting
• Employment scams
• Phishing
• Pigeon drop
• Spanish Prisoner
• Economic and Financial Crimes Commission (EFCC) The Nigerian financial authority mandated to investigate against advance fee frauds.
• True believer syndrome
• PhoneBusters Canadian law enforcement project combating advance fee fraud
• Nigerian organized crime
• Fred Ajudua

[edit] References

[edit] External links

• SCAMwatch website: Australian Competition & Consumer Commission (ACCC) website advising how to recognise, avoid and report scams.
• Glickman, Harvey, "The Nigerian “419” Advance Fee Scams: Prank or Peril?," Haverford College
• "International Financial Scams – Internet Dating, Inheritance, Work Permits, Overpayment, and Money-Laundering," United States Department of State
• "Nigerian Advance Fee Fraud," Australian Institute of Criminology (Abstract: [1])
• "Intelligence agencies team up to tackle cost of crime," BBC