Nigerian 419 Fraud: Big money, big rip-off

An enticing email…promised cash…a trail of victims….Despite warnings, Americans continue to lose millions to Nigerian con artists

If you have a public e-mail account, chances are that sometime in the last few months you received at least one official-sounding message from someone in Africa making an offer that sounded too good to be true.

It is. But that isn’t stopping people from falling for it.

Every month, federal investigators say, hundreds of gullible Americans lose staggering amounts of money to one of the most well-organized rackets on the Web: the Nigerian 419 scam.

Led by gangs of Nigerian con artists, 419 fraud — named for the section of the Nigerian penal code that prohibits it — is picking up steam, thanks to the ease with which hundreds of thousands of e-mails can be sent from an Internet cafe in Africa to people across the world.

Despite repeated warnings from the FBI, the U.S. Secret Service and consumer protection groups, the racket “has continued unabated with increasing sophistication,” the National Bank of Nigeria says in an official warning.

Law enforcement studies estimate that 1 percent of the millions of people hustled each year in a 419 con — also known as advance-fee fraud — end up getting taken to some extent. In the United States alone, that adds up to annual losses of more than $100 million, according to the Secret Service. Globally, experts put the suspected annual take at $1.5 billion.

“Most people just can’t understand how anyone could fall for such offers out of the blue,” said British financial-crimes consultant Peter Lilley, one of the world’s top experts on the scam. “But this is one of the most organized criminal operations in the world with very sophisticated cells operating on a global scale.”

The State Department says 419 scams first surfaced in the mid-1980s when a collapse in the price of oil, Nigeria’s biggest source of foreign income, led well-educated, English-speaking professionals to turn to crime.

There are dozens of variations on the basic scheme. Through unsolicited letters, e-mail, faxes and sometimes even telephone calls, someone purporting to be a well-connected African official offers to split a huge sum of cash — typically tens of millions of dollars — in return for help depositing the money in an American bank.

People who take the bait are sent photographs or copies of documents that seem to verify the existence of the cash. The official then says he needs some money to smuggle the hoard out of Africa, pleading that he has to pay taxes, shipping fees or bribes.

If a victim agrees to send the money, the scam typically doesn’t stop there. The official invites the victim to meet him or his associates, usually either in Nigeria or Europe, to complete the transaction.

That’s when the racket can turn ugly. The State Department links 15 killings or disappearances of Americans abroad to 419 fraud. Since 1995, at least eight other Americans who were lured to Nigeria have wound up being kidnapped or held against their will, according to the U.S. Embassy in Lagos, Nigeria.

Embarrassed victims

The State Department estimates that only 5 to 10 percent of people taken in by 419 fraud report it to authorities.

One of those who did is Lester Turner, an attorney in Harbor Springs. Turner was conned out of $28,000 when he flew to London in 1996 to meet a group of Nigerians who offered him a hefty share of a $25-million fortune.

“You wouldn’t believe these guys. They are so convincing,” Turner recalled. “They look good and sound good, and they have phony documentation and references.”

But Turner suspected a con when his contacts showed him a trunk stuffed with piles of black paper, which they claimed were stacks of $100 bills that had been colored over so the trunk could be slipped past customs inspectors. The con men told Turner they needed $84,000 to pay for chemicals that would remove the black stain from the money. Turner called Scotland Yard. Three Nigerian nationals were convicted of the con and sent to British jails.

Other victims have been taken for more. Ali-Reza Ghasemi, a family physician in Tampa, Fla., and his wife, Shahla, lost just under $400,000 in a 419 scam two years ago.

“This is a terrible, terrible problem,” said Shahla Ghasemi, 42, an Iranian immigrant.

Long-running scam

The con artists who e-mailed Ghasemi had an incredible tale. They told her that a U.S. citizen who died in Nigeria had left her husband $27 million. The Ghasemis had never heard of the man. But when they called a contact number in Nigeria, a man claiming to be an attorney named F.A. Williams told them the dead man was apparently a long-lost relative. Williams faxed back official-looking papers stamped with government seals.

It seemed to be the windfall of a lifetime. To get it, the Ghasemis were told they needed to wire $7,250 to the Nigerian attorney for transfer fees and court costs. They did so.

On the day the transfer was to occur, the attorney called to say that taxes totaling more than $27,000 needed to be paid. The Ghasemis sent another wire. Then there was another hitch. Williams called again to say that the tax bill was bigger than expected. The Ghasemis wired another $63,250 to Williams’ Nigerian account.

Two days later, the Ghasemis received a call from a man identifying himself as a representative of the Nigerian banking system based in Atlanta. He told them they needed to come to Atlanta and sign for the money in person. And by the way, he added, there were U.S. transfer fees of $11,500 that had to be paid in cash.

The Ghasemis flew to Atlanta and rented a hotel room near the airport. Three well-dressed men, all identifying themselves as Nigerians, met them, took the $11,500 and said they would be right back.

Several hours passed. When the men returned, there was yet another obstacle. They said the Nigerian government had released the inheritance in cash instead of check or electronic transfer. But to ship so much money undetected, they said, it had all been painted black. They showed the Ghasemis a huge box filled with currency-sized pieces of black paper.

Dirty money

“They told me to pick one. I reached deep down and took one in the middle of the case,” said Ghasemi. “They took the paper over to the wash basin in our hotel room bathroom and scrubbed it under water. Once the black was off, we saw they were $100 bills.”

Investigators say the con men call this part of the scam the “wash-wash.” The $100 bills are counterfeits covered in washable ink or a waxy combination of petroleum jelly and iodine.

The Ghasemis told the men to clean the money and deposit it into their account.

“They told us that we would have to pay for the chemicals,” Ghasemi said. “We asked how much they needed, and they said it was $185,000.”

The Ghasemis decided they needed to ponder the situation and flew home. They placed another call to the Nigerian attorney. He convinced them the money indeed had to be cleaned and it was expensive because there were so many bills. Reluctantly, the Ghasemis sent the $185,000.

A few days later, the Atlanta banker called to say that there was a final hitch: a $350,000 “transit account” fee.

In desperation, the couple called their Tampa attorney for advice. He referred them to the U.S. Secret Service.

Treasury agents arrested two Atlanta men in connection with the scam last summer. But the nearly $400,000 paid by the Ghasemis — money from savings, a second mortgage on their house and a loan from a relative — has yet to be recovered.

“We are so embarrassed by this,” Ghasemi said. “Looking back on it, we see lots of warning signs. But when it’s happening, they make it sound so reasonable.”

Sophisticated scam

Experts say 419 fraud has moved online partly because postal officials stepped up efforts to intercept letters sent by the con artists.

“Now they’ve really discovered the Internet and e-mail,” said Lilley, whose Proximal Consulting firm specializes in investigating financial crimes. “There’s a global deluge of them being sent out.”

Lilley said the organizations which run the scam are tightly controlled. “They operate a complicated cell structure like that utilized by terrorist organizations,” he explained. “They have counterfeiters, letter and e-mail writers, telephone solicitors . . . even housing managers to control the various accommodations and addresses they need around the world.”

The Secret Service opened an office last year in Lagos to help Nigerian police investigate the 419 rings. But the country’s government has long been plagued by corruption, and Lilley says the con artists have deep connections inside the world’s financial system.

“The Nigerians deliberately and actively infiltrate organizations by placing their own people inside as employees,” he wrote in a recent report to corporate clients. “This enables them to acquire inside information.” Added Lilley: “This is no imaginary scare story. This is actually happening.”

HOW TO GET HELP
Experts offer the following tips on how to avoid getting ripped off:

• Be highly suspicious of any unsolicited offer that comes to you by e-mail from someone you don’t know, especially if it is from overseas and hints at huge profits.

• Never give anyone you do not know well your Social Security number, a bank account number or your credit card information by e-mail or on the telephone.

• If someone tells you in an e-mail or phone call that you must act immediately or you’ll lose some purported opportunity, realize that this is a common tactic of con artists. Get sound advice from someone you trust before proceeding.

You can check out the following Web sites to identify current scams on the Net and to report solicitations to authorities:

• 419 Coalition (http://home.rica.net/alphae/419coal): The most comprehensive site on the Nigerian scam, with reports and information going back five years.

• U.S. Secret Service (http://www.treas.gov/usss/alert419.htm): Background, warnings and how to report losses or solicitations.

• Current 419 letters (www.quatloos.com/scams/nigerian.htm (http://www.quatloos.com/scams/nigerian.htm)): A list of about 150 of the most current Nigerian scam e-mails.

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