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January 26, 2004
Robertson Barrett
Special to Consumer Reports WebWatch
"I am Mr. Simon Nelson, the auditor of ECOBANK BENIN," began a recent e-mail
to Consumer Reports WebWatch.
Nelson had quite an offer for us. It seemed he had stumbled upon a
long-forgotten account in his West African bank and was willing to cut us in for
a third of this fortune if we’d just help him with a little stateside paperwork.
"I want to transfer Forty Five million United States Dollars into a safe
foreigner’s account abroad, but I don't know any foreigner
(sic)," he wrote. "I want to ask you to quietly look for a reliable and
honest person who will be capable and fit to provide either an existing bank
account or to set up a new bank account immediately to receive this money."
Millions of people worldwide have received offers like this one over the last 20
years – by letter, fax, e-mail and, lately, via instant messages. Although our
correspondent never answered our replies, other purveyors of such unsolicited
schemes have lured gullible or greedy recipients into giving away their money
without their ever receiving a dime of the promised windfall.
At some point, there's always a last-minute snag in which the would-be recipient
needs to pay an "advance fee," "transfer tax" or other expense to make the
transaction happen. It’s so much less than the promised millions that thousands
of people have done so, whereupon – surprise – Nelson and his ilk are suddenly
unreachable, and victims are out thousands of dollars. The Internet Fraud
Complaint Center reports Nigerian fraud victims lost an average $3,864 in 2002,
according to consumer complaints, making it the most
lucrative scam on the Internet that year.
Old Idea, New Twists
The classic version of the scam is known as "Advance Fee Fraud" and "419," after
the relevant section of the Criminal Code of Nigeria, where most of these
messages originate. [See sidebar:
"Why Nigeria?"] The variations on the pitch are endless – it might be a
large "bequest" in a will or an "overinvoiced" Nigerian oil contract – yet the
e-mail messages have grown so common that many Internet users pay no attention.
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But in the last year, and even the last few weeks, the old idea has taken on
several new forms, and this fooled a growing number of people, says Keith
Lourdeau, deputy assistant FBI director for cybercrime. In one variation that
produced an FBI warning in November, victims receive a cashier's check for
thousands of dollars and deposit it into their bank. Cashier's checks appear to
clear instantly, and victims then wire their foreign email correspondent a large
portion of the funds, as agreed. The next day, they're informed the check is
fraudulent and are held liable for the transfer amount.
For every version that wouldn't fool many people, there's another that might.
For example, the cashier's check scam popped up on the eve of war in Iraq last
year, when West African scammers posed as frightened Iraqis trying to move
assets out of their country before the U.S. invasion.
And just last month, the Nigerian newspaper ThisDay
reported, a band of Nigerians masquerading as coalition troops stationed in
Baghdad claimed in e-mail to have unearthed heaps of Saddam's treasure: "The
goods were captured here in Baghdad, abandoned in one of the Saddam Hussein's
Treasure House. … Please, note, this issue must be handled with utmost
confidentiality as to avoid publicity!" They promised the e-mail recipients 25
percent of the value of the goods in cash, in return for using their bank
account to facilitate payment of the shipment.
Annie McGuire, a fraud victim advocate from Long Beach, Calif., says public
awareness and spam-blocking programs have forced scam artists to be more
creative. They now prowl classified ad and auction sites like eBay, job sites
like Monster.com, and instant messaging services like AOL’s to find victims, she
says. "You can be online and get an 'IM’'[instant messaging] saying, 'Hi, I live
in Romania, I sell items on eBay and I receive American checks I cannot process.
Can you help me?'"
A lot of people appear to be falling for these pitches, at least at the outset.
The U.S. Secret Service, which has primary responsibility for handling 419
cases, receives about 100 telephone calls and 300 to 500 letters or e-mail from
victims each day. And although the Service believes many victims do not report
their losses to authorities due to either fear or embarrassment, its Financial
Crimes Division nonetheless estimates annual U.S. losses in the hundreds of
millions of dollars.
But there's good news, too: The FBI is seeing more 419 activity because Internet
users are spotting it, not falling for it. “The output of the letters is growing
just because they’re spamming them all over the world," says Lourdeau. "The
potential of the crime is growing. But we have not received an increase in
individuals actually providing complaints that they have been taken in."
Annie McGuire says the anecdotal evidence, and human nature, suggest otherwise.
"The victims have been people who do no homework whatsoever," she says. "These
offers seem like magic, and people want magic to happen."
419s: What to Do
• If you receive suspicious e-mail promising money in exchange for
performing a bank transfer, report the e-mail to the FBI's Internet Fraud
Complaint Center (http://www.ifccfbi.gov)
and forward it to the Secret Service at
419.fcd@usss.treas.gov, where it will be archived.
• If you have lost money in a 419 scheme, contact your local Secret Service
field office (http://www.secretservice.gov/field_offices.shtml)
• If you're not sure whether it’s a 419 scam, guidelines are available from the Secret Service (http://www.secretservice.gov/alert419.shtml) and the 419 Coalition (http://home.rica.net/alphae/419coal/). ^ Back to top
SIDEBAR: Why Nigeria?
In November, the FBI's Operation Cybersweep identified Ghana, Latvia and Romania
as the most common sources of 419 fraud, after Nigeria. Why there? Keith
Lourdeau, deputy assistant FBI director for cybercrime, says certain scam
techniques become parts of the culture in certain countries, almost functioning
as cottage industries. "Historically, they could do it in those countries and
get away with it. There wasn't any law enforcement addressing it."
Until recently, he says, U.S. law enforcement officials were frustrated when
trying to pursue Internet criminals inside their own borders, but that situation
is changing. In 2002, after years of foreign perceptions that it condoned the
fraud because it boosted the Nigerian economy, the Nigerian legislature created
the Economic and Financial Crimes Commission (http://www.efccnigeria.org),
which laid down the first substantive Nigerian laws against white-collar crime.
"We're receiving very good cooperation now from Nigeria and nearby Ghana," says
Lourdeau. "We had agents over there two months ago working on the scams. We can
identify some through the government's cooperation, and we’re now receiving some
prosecutions."
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Robertson Barrett, a media consultant and writer, was a
founder and managing editor of TIME.com and ABCNEWS.com. He was also vice
president and general manager of The FeedRoom, a nationwide broadband news
network in partnership with NBC and Tribune, and of Channel One Interactive, the
educational television network's new media division.
In October 2002, he wrote about
spyware and
Internet "washers" for Consumer Reports WebWatch.
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© 2005 Consumers Union of U.S., Inc.
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