- Business and Employment
Beware The Advance Fee Fraudsters
Investigating advance fee frauds
For the fraud investigator investigating advance fee frauds can be very difficult. Traditionally they originated in Nigeria as the 418 scam - but the problem is world wide. Somebody is trying to get you to pay money up front so that they can release large sums of money to you - only once they get your money they up sticks and disappear.
As a forensic accounting specialist investigating these frauds it can be almost impossible to trace activities back to the source. The crooks operate in cells, often in counties hostile to investigators and extradition. If the authorities ever get too close, no matter how much the fraudsters have invested in a particular scam they will close down and set up again in a different country. The cells never work together and only communicate by mouth.
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The way it works
The name of the fraud is taken from S 419 of the Nigerian legislative act which defines the offense of advance fee scamming. Although this Nigerian 419 fraud has been in operation since the 1980s—contacting victims first by letters, fax communication and now more efficiently by e-mail—advance fee frauds have been going strong for centuries.
The approach is often from an apparently wealthy person looking for somebody to help them out. They promise the victim a percentage of a big sum of money but there are always problems in getting the funds transferred out of their country. If the victim helps to grease the "administrative wheels" with a small fee to bribe corrupt officials he or she will be reimbursed once the money is received.
But more and more expenses always crop up. The victim is strung along with false promise after promise until the fraudsters can get no more money out of the unwary victim, then the crooks disappear. Contact details no longer work. This kind of fraud works best with those greedy victims who wanted something for nothing. It plays on their greed and after all, what is a few thousand compared to a couple of million?
Often the fraudster claims to be a businessman who just needs a little money to get his products from his location to yours. When importing fishing flies from Kenya from a seemingly reputable agent I was asked for "advice" on how the agent could deal with a request he had for several million pound worth of veterinary drugs he had been asked to source. The commission for the UK agent was about £1,200,000! Either my agent was being conned myself or he was cleverly trying to get my interest I will never know. I sensibly told the chap to get references from his inquiry before proceeding any further and otherwise showed no interest in the opportunity. Did I miss the chance to become a millionaire for a few days work? I don't think so - and it shows that so called "Nigerian" scams are not limited to Nigeria but are in fact a world wide problem.
Another variation is the stranded, persecuted church. This one plays into the sympathies of the religious helper. They always want money up front, sort of like most work-from-home scams or time-share resellers. Fall for these scams at your own peril.
When forensic accountants investigate these frauds their job can be quite difficult indeed. Whys is this? It is because the perpetrators are almost military in their discipline. One whiff of the authorities closing in and they close down and start afresh somewhere else. They opperate in cells and cannot or will not be persuaded to divulge details of other operations.
As a fraud investigator working in the private sector I have come across many victims of advance fee fraudsters but have never been able to do more than pass on the details to the police. This is because only the law enforcement officers have the authority, ability and most importantly desire to investigate cross border jurisdictions in places like Nigeria. many victims have traveled to Africa in the hope of meeting the so called business men to assist with the transfer of money back to them. In many cases they have never been seen again.
Fortunately the governments of places such as Nigeria have been proactive in trying to stamp out the fraud and corruption that is disadvantaging their trade and standing in the international community. Legislation such as the 419 code has gone a long way to counter the problem but much more is needed by the authorities all round the world if the problem is to go away.