Financial Scams

Recently many individuals and businesses have been fascinated by the Advance Fee Fraud scam that originates from several countries in Africa and particularly from Nigerian, Liberians and Sierra Leonians. Some Ghanaians have also been involved. In order to prevent yourself from becoming a victim of this scam, please look over the following information:

The perpetrators of Advance Fee Fraud (AFF), known internationally as “4-1-9” fraud after the section of the Nigerian penal code which addresses fraud schemes, are often very creative and innovative. A large number of victims are enticed into believing they have been singled out from the masses to share in multi-million dollar windfall profits for doing absolutely nothing. It is also a misconception that the victim’s bank account is requested so the culprit can plunder it — this is not the primary reason for the account request — merely a signal they have hooked another victim.

  • In almost every case there is a sense of urgency;
  • The victim is enticed to travel to Ghana or a nearby country;
  • There are many forged official looking documents;
  • Most of the correspondence is handled by fax or through the mail;
  • Blank letterheads and invoices are requested from the victim along with the banking particulars;
  • Any number of fees are requested for processing the transaction with each fee purported to be the last required;
  • The confidential nature of the transaction is emphasized;
  • There are usually claims of strong ties to local government officials;
  • A Ghanaian residing in the U.S., London or other foreign venue may claim to be a clearing house bank for the Central Bank of Ghana;
  • Offices in legitimate government buildings may even be used by impostors posing as the real occupants or officials.

The most common forms of these fraudulent business proposals fall into seven main categories:

  • Disbursement of money from wills
  • Contract fraud (C.O.D. of goods or services)
  • Purchase of real estate
  • Conversion of hard currency
  • Transfer of funds from over invoiced contracts
  • Sale of crude oil at below market prices
  • Sale of gold at below market prices
  • Advance fees or ‘gifts’ requested to enable U.S. company to be awarded lucrative tender
  • Advance fees to finalize an offer of employment

The most prevalent and successful cases of Advance Fee Fraud is the fund transfer scam. In this scheme, a company or individual will typically receive an unsolicited letter by mail from a “scammer” claiming to be a senior civil servant. In the letter, the imposter will inform the recipient that he is seeking a reputable foreign company or individual into whose account he can deposit funds ranging from $10-$60 million that his government overpaid on some procurement contract.

Initially, the intended victim is instructed to provide company letterheads and pro forma invoicing that will be used to show completion of the contract. One of the reasons is to use the victim’s letterhead to forge letters of recommendation to other victim companies and to seek out a travel visa from the American Embassy in his country. The victim is told that the completed contracts will be submitted for approval to the Central Bank (or any other Commercial or Regional bank) in the country where he is located. Upon approval, the funds will be remitted to an account supplied by the intended victim.

The goal of the criminal is to delude the target into thinking that he is being drawn into a very lucrative, albeit questionable, arrangement. The intended victim must be reassured and confident of the potential success of the deal. He will become the primary supporter of the scheme and willingly contribute a large amount of money when the deal is threatened. The term “when” is used because the con-within-the-con is the scheme will be threatened in order to persuade the victim to provide a large sum of money to save the venture.

The letter, while appearing transparent and even ridiculous to most, unfortunately is growing in its effectiveness. It sets the stage and is the opening round of a two-layered scheme or scheme within a scheme. The fraudster will eventually reach someone who, while skeptical, desperately wants the deal to be genuine.

Victims are often convinced of the authenticity of Advance Fee Fraud schemes by the forged or false documents bearing apparently official government letterhead, seals, as well as false letters of credit, payment schedules and bank drafts. The fraudster may establish the credibility of his contacts, and thereby his influence, by arranging a meeting between the victim and “government officials” in what may appear to be government offices.

Indications are that Advance Fee Fraud in West Africa grosses hundreds of millions of dollars annually and the losses are continuing to escalate. In all likelihood, there are victims who do not report their losses to authorities due to either fear or embarrassment.

In response to this growing epidemic, the United States Secret Service established “Operation 4-1-9” designed to target Nigerian and other Advance Fee Fraud on an international basis. The Financial Crimes Division of the Secret Service receives approximately 100 telephone calls from victims/potential victims and 300-500 pieces of related correspondence per day.

If you have already lost funds or feel you may currently be involved in the above described scheme, please contact your local Secret Service field office.

You can find out more about this scam on the FBI’s website, and more about International Financial Scams in general on the Bureau of Consular Affairs website. If you have already lost funds or feel you may currently be involved in the above-described scheme, please contact your local Secret Service field office and file a complaint with the FBI’s Internet Crime Complaint Center.

Please also see important information on Romance Scams.