The Rainbow Scam Report
The Nigerian Letter Scam - Advance Fee Scams
(403) 245-0533 / (403) 651-9049
Since sometime in the 1970’s a new fraud marketing concept developed with the development of the internet, email, and international communication. What would become the world's most famous consumer fraud technique would be a concept, developed originally from Africa, but is no longer restricted to there, where fraud artists deliberately send out unsolicited messages asking for assistance to get money through bureaucratic circles.
The scams have been broadly described as "The Nigerian Letter Scam", "Advance Fee Scams" or "The 419 Scam".
The Scam operates as follows: the target receives an unsolicited fax, email, or letter often concerning Nigeria or another African nation containing either a money laundering or other illegal proposal OR you may receive a Legal and Legitimate business proposal by normal means.
Common variations on the Scam include:
- "overinvoiced" or "double invoiced" oil or other supply and service contracts where your Bad Guys want to get the overage out of Nigeria (Classic 419);
- crude oil and other commodity deals (a form of Goods and Services 419);
- a "bequest" left you in a will (Will Scam 419);
- "money cleaning" where your Bad Guy has a lot of currency that needs to be "chemically cleaned" before it can be used and he needs the cost of the chemicals (Black Currency 419);
- "spoof banks" where there is supposedly money in your name already on deposit; "paying" for a purchase with a check larger than the amount required and asking for change to be advanced (cashier's check and money order 419);
- fake lottery 419;
- chat room and romance 419 (usually coupled with one of the other forms of 419);
- employment 419 (including secret shopper 419);
- and ordering items and commodities off "trading" and "auction" sites on the web and then cheating the seller.
The variations of "Advance Fee Sam" or "(419)" are very creative and virtually endless; so do not consider the above as an all-inclusive list!
During phase one, intended victims receive a letter, either by mail of fax supposedly from officials of a large Nigerian institution, such as the Nigerian National Petroleum Corporation, or the Central Bank of Nigeria.
These letters are sent out in bulk, with victims being picked out from corporate directories, and professional memberships. The letters request an urgent and confidential business relationship between the perpetrators of the fraud, and the intended victim. The purpose is stated to transfer funds out of Nigeria to financial institutions in the victim's country of residence.
The funds are generally represented as over-invoiced contracts typically in the range of $25 million U.S. The letters are allegedly from Nigerian civil servants who bogusly claim they have a legitimate right to the over-invoiced funds. The letter goes on to explain that Nigerian civil servants are forbidden to own or operate a foreign account, and therefore they need the victim's assistance. The victim is falsely offered 10 to 30 percent of the total contract as payment. The victim is asked to forward personal financial information, including banking information, as well as copies of the victim's corporate letterhead so that payment can be made through a contract claim in the victim's name. Then the victim is asked to wire a payment of approximately $10,000 U.S. supposedly for legal fees and administration costs in order to secure the business arrangement. Once the victim has wired the money along with the banking information, Phase 2 of the scam begins.
In phase 2, the same victim receives a telephone call from confederates in the criminal group, who are now posing as merchant bankers employed by the Central Bank of Nigeria. The phony bankers advise the victim that the total contract funds have cleared Nigeria, and are now in an alleged clearinghouse or mercantile bank in North America. Then the scam continues when the victim is informed that before the victim's promised money can be claimed, there are further outstanding fees that the victim must pay. These additional fees are supposedly for charges such as taxes, duties, or environmental levies, and can range from $50,000 U.S. to hundreds of thousands of dollars.
Please click the image above for an interactive flowchart
(courtesy of .NExT Web Security)
The perpetrators continue to go after the victim to pay even more fees until the victim is broke. None of the victims ever receive any money from these business arrangements, nor a return of their investments.
If all the contracts that this criminal group presented were fulfilled, the criminal group would need in excess of $8 billion U.S.
The perpetrators tend to be knowledgeable in international banking, are well spoken, and are professional in their dialogue and behavior with victims.
In the early days most 419 letters and emails originate from or were traceable back to Nigeria. Eventually, some did originate from other nations, mostly also West African nations such as Ghana, Togo, Liberia, Sierra Leone, Ivory Coast (Cote D’Ivoire), and then South Africa. In many cases 419 emails from other nations were also Nigerian in that the "Home Office" of the 419ers involved was Nigeria regardless of the source of the contact materials.
There are many good sites with information about the Nigerian Advance Fee Fraud. The traditional one with the best information has been one called the “419 Coalition” found here.
One of the best ones currently is the site of an international investigation firm called Ultrascan Advanced Global Investigations located here.
For an absolutely thorough analysis of the parameters of the Nigerian Avance Fee Fraud, click on this report from Ultrascan Advanced Global Investigations which describes in phenomenal detail the extent globally of this incredible fraud.
You can download the PDF file here
(the Adobe Reader is required to view PDF files)
So what do you do if you have received one of these unsolicited requests for assistance? By far the best thing to do if you got the letter through email, is simply delete it. If you got a letter (which has been happening in Canada recently to business owners), shred it. The worst thing you can do is respond!!!
If you have made the mistake of dealing with these people:
In Canada contact Phonebusters here.
If you are in the U.S., contact either the Secret Service or the Federal Bureau of Investigation through this link.
Of course, there are daily stories on this fraud; here is a small sampling of ones we have presented since 2001:
Rainbow Investigations Nigerian Newsletter Stories
Major Nigerian Letter Scam Conviction
In July 2005, the Nigerian Government got a huge conviction of a financial fraud scammer...
August 14, 2005
419 / Nigerian Letter Scam / Advance Fee Scams
Here is the latest on the world's most famous internet based scam...
December 01, 2003
African Advance Fee Scams Continue To Grow
They are from all over Africa now, and they continue to grow...
April 23, 2003
Two Africans In Court For Nigerian Letter Scam
The South African government is proceeding with charges against a husband and wife team using the Nigerian letters to obtain money...
December 29, 2002
Nigerian Letter / 419 Scam – The Latest
This is really hot - the latest on one of the most huge scams ever!
September 17, 2002
Two Nigerians Sent To Prison For Nigerian Letter Scam
A relatively small price is paid by Nigerians for this scam involving many North Americans...
March 18, 2002
Miscellaneous Financial Scams
In this scam, an innocent recipient receives a phone, faxed, email or pager message that asks the recipient to telephone the sender of the message immediately using an 809 area code…
August 23, 2001
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