Nigerian 419 Scams
The Nigerian Advance Fee Scam, also known internationally as 4-1-9 fraud after the section of the Nigerian penal code which addresses fraud schemes, has been around since the early 1980's. There is a perception that no one is prone to enter into such an obviously suspicious relationship and be conned by such a scheme. However, the Financial Crimes Division of the United States Secret Service receives approximately 100 telephone calls from victims and potential victims and 300-500 pieces of related correspondence per day!
The Nigerian 419 scams use the following tactics:
- An individual or company receives a letter, fax or email from an alleged official representing a foreign government or agency;
- An offer is made to transfer millions of dollars in "over-invoiced contract" funds into your personal bank account;
- You are encouraged to travel overseas to complete the transaction;
- You are requested to provide bland company letterhead forms, banking account information and telephone/fax numbers;
- You receive numerous documents with official looking stamps, seals and logos testifying to the authenticity of the proposal;
- Eventually you must provide up front or advance fees for various taxes, attorney fees, transaction fees or bribes;
Other forms of 419 schemes include: C.O.D. of goods or services, real estate ventures, purchases of crude oil at reduced prices, beneficiary of a will, recipient of an award, or paper currency conversion.
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
Fund Transfer Scams
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 Nigerian claiming to be a senior civil servant. In the letter, the Nigerian 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 the Nigerian government overpaid on some procurement contract.
The criminals obtain the names of potential victims from a variety of sources including trade journals, professional directories, newspapers, and commercial libraries. They do not target a single company, but rather send out mailings en masse. The sender declares that he is a senior civil servant in one of the Nigerian Ministries, usually the Nigerian National Petroleum Corporation (NNPC). The letters refer to investigations of previous contracts awarded by prior regimes alleging that many contracts were over-invoiced. Rather than return the money to the government, they desire to transfer the money to a foreign account. The sums average between $10,000,000 to $60,000,000 and the recipient is usually offered a commission up to 30 percent for assisting in the transfer.
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 travel visa. The victim is told that the completed contracts will be submitted for approval to the Central Bank of Nigeria. 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 surely 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 also convincing to some. 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 almost always requested to travel to Nigeria or a border country to complete a transaction. Individuals are often told that a visa will not be necessary to enter the country. The Nigerian con artists may then bribe airport officials to pass the victims through Immigration and Customs. Because it is a serious offense in Nigeria to enter without a valid visa, the victim's illegal entry may be used by the fraudsters as leverage to coerce the victims into releasing funds. Violence and threats of physical harm may be employed to further pressure victims. In June of 1995, an American was murdered in Lagos, Nigeria, while pursuing a 4-1-9 scam, and numerous other foreign nationals have been reported as missing.
Victims are often convinced of the authenticity of Advance Fee Fraud schemes by the forged or false documents bearing apparently official Nigerian 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 real or fake government offices.
In the next stage, an alleged problem will arise concerning the "inside man." An official will demand an upfront bribe, or an unforeseen tax or fee to the Nigerian government will have to be paid before the money can be transferred. These can include licensing fees, registration fees, and various forms of taxes and attorney fees. Normally each fee paid is described as the very last fee required. Invariably, oversights and errors in the deal are discovered by the Nigerians, necessitating additional payments and allowing the scheme to be stretched out over many months.
When doing business with people from Nigeria
- NEVER pay anything up front for any reason.
- NEVER extend credit for any reason.
- NEVER do anything until their check clears.
- NEVER expect any help from the Nigerian Government.
- NEVER rely on your government to bail you out.
Reporting Nigerian 419 Scams
In general, if you receive a Nigerian 419 Scam letter, you should report it to your local authorities.
In the United States:
- If you have not lost any monies to this scheme, fax a copy of the scam letter to the U.S. Secret Service on (202) 406-5031.
- If you have lost monies and you live in the U.S., the U.S. Secret Service asks that you forward appropriate written documentation to:
U.S. Secret Service
Financial Crimes Division
950 H Street, NW,
Washington, DC 20001.
Or send e-mail to email@example.com
Outside of the United States:
- Report the scam to your local authorities.
- Fax a copy of the scam letter to the U.S. Secret Service on (202) 406-5031.
Example Nigerian 419 Letter
The following is an example of a Nigerian 419 scam letter.
Attention: The President/CEO
Confidential Business Proposal
Having consulted with my colleagues and based on the information gathered from the Nigerian Chambers Of Commerce And Industry, I have the privilege to request for your assistance to transfer the sum of $47,500,000.00 (forty seven million, five hundred thousand United States dollars) into your accounts. The above sum resulted from an over-invoiced contract, executed commissioned and paid for about five years (5) ago by a foreign contractor. This action was however intentional and since then the fund has been in a suspense account at The Central Bank Of Nigeria Apex Bank.
We are now ready to transfer the fund overseas and that is where you come in. It is important to inform you that as civil servants, we are forbidden to operate a foreign account; that is why we require your assistance. The total sum will be shared as follows: 70% for us, 25% for you and 5% for local and international expenses incident to the transfer.
The transfer is risk free on both sides. I am an accountant with the Nigerian National Petroleum Corporation (NNPC). If you find this proposal acceptable, we shall require the following documents:
(a) your banker's name, telephone, account and fax numbers.
(b) your private telephone and fax numbers -- for confidentiality and easy communication.
(c) your letter-headed paper stamped and signed.
Alternatively we will furnish you with the text of what to type into your letter-headed paper, along with a breakdown explaining, comprehensively what we require of you. The business will take us thirty (30) working days to accomplish.
Please reply urgently.