Advance-fee scam

Advance fee fraud, often also known as the Nigerian money transfer fraud, Nigerian scam or 419 scam after the relevant section of the Nigerian Criminal Code [1] that it violates, is a fraudulent scheme to extract money from investors living in rich countries in Europe, Australia, or North America. This type of scam, originally known as the "Spanish Prisoner Letter" [2], has been carried out since at least the 16th century via ordinary postal mail. They have come to be associated in the public mind with Nigeria due to the massive proliferation of such confidence tricks from that country since the mid-eighties, although they are often also carried out in other African nations, and increasingly from European cities with large Nigerian populations, notably London and Amsterdam.

Originally, the schemers contacted mainly heads of companies and church officials, however, the use of e-mail spam and instant messaging for the initial contacts has led to many private citizens also being targetted, as the cost to the scammers to make initial contact is much lower.

The United States Federal Trade Commission has issued a Consumer Alert about the Nigerian scam. It says: "If you receive an offer via email from someone claiming to need your help getting money out of Nigeria — or any other country, for that matter — forward it to the FTC at spam@uce.gov."

How the scam operates

The 'investors' are contacted, typically with an offer of the type "A rich person from the needy country needs to discreetly move money abroad, would it be possible to use your account?". The sums involved are usually in the millions of dollars, and the investor is promised a large percentage, often 40%. The proposed deal is often presented as a (harmless) white-collar crime, in order to dissuade participants from later contacting the authorities. The operation is professionally organized in Nigeria, with offices, working fax numbers, and often contacts at government offices. The investor who attempts to research the background of the offer will usually find that all pieces fit perfectly together.

If they then agree to the deal, the other side will first send several documents bearing official government stamps, seals etc., and then introduce delays, 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. 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.

Sometimes, victims are invited to Nigeria and get to meet real or fake government officials. Some victims that travel are instead held for ransom. In some cases they are smuggled into the country without a visa and then threatened into giving up more money, as the penalties for being in Nigeria without a visa are especially severe. In the most extreme cases the victim is even murdered.

In any case, the promised money transfer never happens, of course. The money or gold does not exist.

The country involved is not always Nigeria. Ghana, Côte d'Ivoire, South Africa and other West African states are sometimes seen. Occasionally the scam operates from a non-African country such as the Netherlands (Amsterdam), the United Kingdom (London), Spain (Madrid) or Canada (Toronto) but this number is on the rise.

A variant of the scam will appear to be sent by a barrister, representing the estate of some long-lost relative the victim never knows he or she had (the victim's family name (last name) will be inserted into the e-mail message) who perished along with his or her family in a car or airplane accident last April; the scammer will claim to have gone to a lot of trouble to find the victim in order to give him or her a share of the millions of dollars available if the victim will forward his or her bank account information to the scammer.

Another variant pretends to be a "winning notification" from a lottery company, typically in the UK or the Netherlands, requesting payment in advance to collect the sum that the victim has "won".

In a newer version of the scam, the scammer offers to buy some expensive item (which the victim advertised on eBay, for example) by official, certified, bank or cashier's check. The check will have an "accidentally" or mutually agreed higher value than the price of the item, so the scammer asks the victim to wire the extra money to some third party as soon as the check clears. The check typically clears after one or two days, but the fact that it is counterfeit is not detected until several days or weeks later, by which time the victim has sent the item and the "additional money" to the scammer and his representative. Most banks will hold the victim accountable for the value of the counterfeit check.

The latest variant of the scam are the fake charity and fake church scams. In this type of scam the victim is asked to donate or invest in a local (often West African) charity or church. While no direct monetary benefit is presented to the victim, these scams are perpetrated by the same scammers that also employ more traditional advance fee fraud and the scams follow roughly the same modus operandi as the previously mentioned scams.

Interestingly, 419 spam is significantly less sophisticated in its delivery methods than almost all other spam regularly seen. The spam is almost always sent via free webmail services such as Hotmail or very occasionally with paid services, often paid for with credit card details stolen from former victims. This is also the method used to pay for the hosting of websites for the fake banks, companies and escrow services used in the later stages of the scam.

The spams are normally sent from internet cafes, the addresses to be sent to and bodies of the mails copied and pasted from memory sticks into the webmail interface. Some London-based gangs have been known to use spamware on laptops which they surreptitiously connect to the cafe's network, but even this software is notably out-of-date. While this method is significantly more labour-intensive per mail sent than others, it offers near-total anonymity and allows them to very quickly and easily relocate. The often very professional layout of web pages and so on used in the scams suggests that they do not lack technical sophistication at least at the upper levels of the gangs.

Estimates of Losses

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." " [3]

Consequences

Some investors have hired private investigators in Nigeria or have personally travelled to Nigeria, without ever retrieving their money. One American was murdered in Nigeria while pursuing his lost money. In February 2003, a scam victim from the Czech Republic shot and killed an official at the Nigerian embassy.

Victims of 419 Advance Fee Fraud have little recourse. Since 1995, the United States Secret Service has been (somewhat) involved in combatting these schemes, however they will not investigate unless the monetary loss is in excess of 50,000 US Dollars. Very few arrests and prosecutions have been made due to the international aspect of this crime.

A better track record is held by the South African Police Services. Inspector Rian Visser has enlisted the help of scam baiters to identify and track down scammers that operate from South Africa and to inform the public about advance fee fraud. So far there have been in excess of 100 arrests made (February 2005).

Apparently, the scams, while usually performed by Nigerians, do not always originate in Nigeria. In 2004, 52 suspects were arrested in Amsterdam after an extensive raid. An Internet service provider had noticed the increased email traffic. However, out of these 52 none has been jailed or fined to date, due to lack of evidence. They were released in the week of July 12, 2004.

If you have been scammed, it is not advised that you attempt to retrieve your lost money, since the chances of any money being found, or returned, is extremely remote. Also, the inherent dangers of continued contact with these criminals are very great.

Recently, a new tier of scam-artists has arisen, those that target previous victims of 419 Advance Fee fraud by posing as Nigerian police, "Anti-Fraud Investigators" or "Fraud Recovery Experts".

Origin of the scam

The origin of the 419 scam is currently debated. Many critics believe that the scam first was introduced to Nigeria by Nigerian petroleum companies and criminal gangs in the 1970s or 1980s. Others believe that the scam was a combination of different frauds in the Igboland region, some hundreds of years old. The first scams involved lucrative oil contracts and other related frauds. Until about 2001, the scammers were located primarily in Lagos, Aba, Owerri, and Port Harcourt, Nigeria. The scammers have recently set up bases in many countries besides Nigeria, including Togo, the Ivory Coast, the Netherlands, the United Kingdom, and Canada.

Scam baiting

A number of Internet groups have invented the hobby of scam baiting. The object is to pretend to be interested in the scammer's scheme, while convincing the scammer to waste his time, perform ridiculous tasks, or otherwise entertain the baiter. Some scam baiters have even persuaded scammers to travel to another country to meet them. One scam baiter even convinced the scammer to go to the Western Union agency to collect a nonexistent money transfer 23 times before the scammer realized what was going on.

These scams have the weak point of having to use a working email account. Forwarding such emails to the abuse@ address of the scammer's e-mail service can get scams shut down quickly.

419 guestbook spamming

419 guestbook spam is a type of spam in which Nigerian 419 scammers attempt to mark their "guestbook turf." The "lads", as the scammers are sometimes referred to, apparently depend in large part upon guestbook entries to harvest usable email addresses.

A Google search for "mugu@mugu.com" or "guestbook mugu" currently shows over eleven thousand entries in various guestbooks with the "From:" address being specified as "mugu@mugu.com". The text of most of the entries is usually some jibberish along the lines of "I don dere" or "mugu keep ooooooooff". It remains unclear how the scammers generate such an enormous amount of entries, although judging from a few IP addresses shown in the guestbooks, it looks to be at least a few people involved.

The legitimate site mugu.com, states that they are in no way involved with the spam.

The word mugu is a Nigerian pidgin word that means fool. The Yorùbá form of the word is mugun.

Example "mugu" guestbook entries

"mugu keep offffff": Translation: Fool/idiot stay away.

"i dey here ooooooooooo": Translation: I am here; this is my turf.

"nwa nne keep off": Translation: Sibling, stay away ( Nwanne literarily means mother's child. Nwanne is an Igbo word that is used the refer to people like "Brother" and "Buddy". For example: Hey Brother, what's happening? or Hey Buddy, you got the time?)

"ndi igbo keep offffff": Translation: Igbo people stay away (many 419 scammers are Igbo).

"work in progress ok my guys keep it uppppp all mugus stay clear": Translation: My work is in progress. My friends, keep up the work, and all fools stay clear.

Sample scam letter

Here is an example of a typical email message which attempts to attract victims:

From: "BIBI LUCKY" <bibialora1@yahoo.com>
Subject: can you?
Date: Thu, 28 Mar 2002 15:03:44 +0100
To: John.Doe@somewhere.com
Reply-To: bibialora1@yahoo.com

Dear Sir,

ASSISTANCE REQUIRED FOR ACQUISITION OF ESTATE

I write to inform you of my desire to acquire estates
or landed properties in your country on behalf of the
Director of Contracts and Finance Allocations of the
Federal Ministry of Works and Housing in Nigeria.

Considering his very strategic and influential
position, he would want the transaction to be as
strictly confidential as possible. He further wants
his identity to remain undisclosed at least for now,
until the completion of the transaction. Hence our
desire to have an overseas agent.

I have therefore been directed to inquire if you would
agree to act as our overseas agent in order to
actualize this transaction.

The deal, in brief, is that the funds with which we
intend to carry out our proposed investments in your
country is presently in a coded account at the
Nigerian Apex Bank (i.e. the Central Bank of Nigeria)
and we need your assistance to transfer the funds to
your country in a convenient bank account that will be
provided by you before we can put the funds into use in 
your country. For this, you shall be
considered to have executed a contract for the Federal
Ministry of Works and Housing in Nigeria for which
payment should be effected to you by the Ministry, The
contract sum of which shall run into US$26.4 Million, 
of which your share shall be 30% if you agree to be
our overseas agent.

As soon as payment is effected, and the amount
mentioned above is successfully transferred into your
account, we intend to use our own share in acquiring
some estates abroad. For this too you shall also serve
as our agent.

In the light of this, I would like you to forward to
me the following information:

1. Your company name and address if any
2. Your personal fax number
3. Your personal telephone number for easy
communication.

You are requested to communicate your acceptance of
this proposal through my above stated email address
after which we shall discuss in details the modalities
for seeing this transaction through.

Your quick response will be highly appreciated. Thank
you in anticipation of your cooperation.

Yours faithfully,
BIBI LUCKY.

Another example of a Nigerian scam email can be seen on the CIAC Hoaxbusters web site, run by the United States Department of Energy.

Lottery scam

Lottery scam involves fake notices of lottery wins. The winner will be usually asked to send sensitive information to a free email account. This is a form of advance fee fraud as money in advance is often required and is also similar to phishing.

Fake escrow

Another method is after winning a bid on items on the online auction site eBay (especially laptops or other consumer electronics), to suggest to use an escrow service. However, the escrow service is fake and part of the scam. The victim will send the laptop or camera to the escrow service, never to hear from the scammer or escrow service again. The website of the escrow service will typically go offline after the victim has sent his goods.

In one amusing case the victim knew that the supposed buyer was a scammer and scammed the scammer. The whole exchange and pictures was extensively documented on the Something Awful forums. More details here: P-P-P-Powerbook

External links