Advance fee fraud

A scheme in which the victim is offered a commission on a large sum of supposed inaccessible money if the victim will pay a (nonexistent) tax or fee that stands in the way of the collection of that money.

Such scams are usually done using stolen or remarked official letterhead, to lend credibility. Most of these scams originate from Nigeria, where tracing a phone call (sometimes used to initiate these scams) is nearly impossible due to the ad hoc nature of their phone network.

Also known as a 419, after the section of Nigerian law that covers this type of fraud, or simply AFF.

A venerable sub-genre of confidence trick in which people claiming to be corrupt government officials from Nigeria (or sometimes another West African country like Cameroon) seek the assistance of willingly complicit Westerners to launder money for them. Snail mail versions of this scam have been circulating for many years, and e-mail versions are now surfacing. A first approach will typically claim that the writer of the letter has diverted funds from an aid package, skimmed something off the top of a government contract or otherwise laid hands on a large wad of cash by less than savoury means -- and needs a handy offshore bank account (yours) to get the money out of the country. Anybody stupid enough to follow this up -- and it does happen -- is then told a long story the upshot of which is that they need to contribute a large sum up front in order for all of this to work, after which they will of course get it all back plus a nice cut of the proceeds. You can guess what happens next.

This is possibly pure urban legend, but I have been told that there are people who financed trips to the 1996 Olympic Games in Atlanta by taking home suitcases full of American telephone directories, which they then sold off page by page to eager entrepreneurs back home. Apparently in some circles this is viewed as a pretty legitimate business -- under the assumption, I suppose, that anybody dumb enough to fall for a scam like this deserves it.

An Easily Avoided Version of the Nigerian Mail Scam

Where money, lawlessness and desperation collide, the human imagination knows almost no bounds. There are currently a number of illegal schemes working out of western Africa. Generally speaking, the scammers try to purchase goods* or property with counterfeit instruments (checks or money orders). Other familiar variations on the theme have the con artists claiming rights to a vast fortune (which you can have a slice of if you will send a small fee) or claiming to be heading relief efforts for local people.

When my father died in 1995, I inherited three plots at our local cemetery. These are notoriously hard for individuals to sell (the cemetery will buy them back for a couple hundred dollars apiece, but I’ll hold onto them for that). I marketed them on a website for $2,500 apiece.

After about four years without any activity (but the website listing is a very inexpensive gamble), I got an email. It was from a lady who claimed to be "Rose Smith" from Colorado. "Miss Rose" told me, in terribly broken English, that she was in Eastern Europe on holiday. She said that she would send me the money, plus some extra that I could forward to her funeral planner. Needless to say, this seemed a little bit suspicious.

Sensing the setup, I told her that I could not forward money—send only the purchase price. Despite all this, she sent me a money order for $6,550. This woman from Colorado, visiting family in Turkey (or possibly Albania, her emails were extremely muddled), sent a money order in an envelope with no return address. The stamps, however, were from (wonder of wonder) Nigeria. Uh-huh.

My next step was to make sure that I could not get in trouble for depositing this money order into my bank account. The quickest way to find out if it was fake, according to my local police, was to deposit it and see if it came back. My only risk was a small fee from my bank. Meanwhile, "Rose" was trying to make me forward part of the money as soon as I received the money order. I deposited it immediately, but did not tell her that I had received it for several days.

When the money order was returned unpaid (as we knew it would be), I wrote to her and told her so, feigning surprise and confusion. Now, the scam is obvious: fake money is sent and the recipient foolishly wires money to this supposed funeral planner. When the money order turns up as bogus, our foolish recipient is left holding the bill for four thousand American bucks. At this point, the cards were on the table I figured I’d hear no more from her. But she had one more incredibly sloppy gambit.

This time, Miss Rose wrote to me and told me that it was imperative that I wire $500 to her confederate in Moscow so that he could fly here and inspect the property. You have to give her this, she is persistent. I will point out, however, that she disappeared once I told her that I don't have that much money (so much for these fair weather friends!).

Over the course of these goings-on, I spoke to the local police, the FBI and the two different people at the Secret Service. They were all helpful and friendly. Before I put the money order in the bank, I made sure that I was not in any jeopardy depositing this in my account—I did not want to be accused of being in league with the counterfeiters or anything. Then, after it bounced, I talked to them and made sure they did not need it as evidence or something or my testimony—the Secret Service agent said that they don't even open an investigation on these sorts of cases unless a great deal of money was lost.

I only lost the five dollar "returned item" fee and a little time. The Secret Service agent told me that they have "filing cabinets full of those things," so mine would be of no help. The main thing I got out of this was a chance to see how these things work up close ... that and a foreign money order with the cool red block-letter stamp "COUNTERFEIT" across it—which has got to be worth at least five dollars just as a strange conversation piece.

There are many good sites with information about scams coming out of western Africa. Snopes.com has a good list of some of these and FraudWatch International (http://www.fraudwatchinternational.com/) has a page about the 419 scams. For a funny look at how one man took advantage of the scammers, forcing them to do some ridiculous stunts, see http://www.419eater.com/.

*A friend who has a small soap-making company tells me that she routinely gets emails from west Africa about "Soap Emergencies," the people need to get several hundred dollars worth of soap right now—they will pay later. Like I say, the imagination knows almost no bounds.

Editor note: Moved from 419 fraud.

Another name for advance fee fraud. The name 419 fraud originates from Nigerian law where section 419 makes advance fee fraud a punishable offense.

Advance fee fraud works by the perpetrator sending out unsolicited letters or e-mail to unsuspecting recipients. The contents of the letter or e-mail state that there's a large sum of money that they are trying to collect, and there are a few financial barriers in the way that need to be cleared in order to do so. The recipient is encouraged to send in money to assist in paying all the fees associated with trying to collect the sum of cash. In return for their assistance, the letter claims that they will be able to recieve a percentage of the money that is to be collected.

The scam is that people who do take the bait are often forced to send large sums of cash to the scammers until they either become broke or decide to quit and take their loss. The only profit that is made is that the scammers keep the income as their own.

Advance fee fraud is hard to trace, particularly in Nigeria. The scammers often use cell phones and their precise location is hard to pinpoint. Snail mail that is sent may arrive on fake or forged company letterhead. The Nigerian government has set up the Nigerian Fraud Watch to warn unsuspecting people about the scam and the bad PR that the country has recieved as a result. Resources are provided for those who may have lost money and for people who received letters but are not sure what to make of them.