I. INTRODUCTION
On September 19, 2000, the FDIC issued FIL-64-2000, which was a special alert regarding Nigerian Advance Fee Schemes. The Nigerian Advance Fee Schemes have been around for several years, but continue to proliferate through the mail, e-mail or by fax. The Central Bank of Nigeria has issued several press releases warning the public against involvement in the schemes (these are also referred to as “419” fraud – named after the Nigerian penal code section addressing fraud schemes). The FDIC then warned financial institutions to remain vigilant about the risks these schemes pose to an institution and customers. Since this is an international scheme, there are no reliable estimates of the total volume of communications to intended victims. These fraud schemes often combine the threat of impersonation fraud and identity theft with a variation of an advance fee scheme.
Generally, these solicitations allege to originate from “Nigerian officials” who offer promises of sharing in a percentage of lots of money in return for some relatively easy and simple acts by the recipient. The alleged Nigerian official may state that he is with the government and requires assistance in moving funds from Nigeria to the addressee’s bank account. The target victim may be encouraged to send information to the perpetrator, e.g., blank letterhead stationary, bank name and account numbers or other identifying information using a facsimile number, e-mail address and telephone number provided in the letter. The scheme relies on convincing the targeted victim to send money to the perpetrator of the letter in several installments of increasing amounts for a variety of reasons (payment of taxes, bribes to government officials or legal fees) with the promise that all expenses will be reimbursed once the money leaves the country. Once the victim stops sending money, the perpetrators have been known to use the personal information and checks to impersonate the victim, draining bank accounts and credit card balances until the victim’s assets are taken in their entirety. Some victims have even been lured to travel to other countries, where they have been imprisoned against their will or assaulted, in addition to financial loss. The Nigerian government has created the Economic and Financial Crimes Commission in an effort to curb these and related schemes.
Another variation of the scheme contacts the intended victim, requesting him or her to deposit into his or her bank account checks that are issued by customers or contractors. Once these checks are deposited, the perpetrator may request an advance against the checks, which will eventually turn out to be fraudulent. Meanwhile, the victim may have provided the Nigerian with an advance and up-front fees.
II. REPORTING ISSUES
Should your institution or one of your customers receive this type of communication, the bank or customer should immediately notify the nearest U. S. Secret Service office or U. S. Postal Inspection Service office. In Nebraska, these types of letters may be turned over to the U.S. Secret Service at the following address:
U.S. Secret Service
1616 Capitol Avenue
Omaha, NE 68102
Phone: 402-965-9670
For more information on this scam and other “Advance Fee Fraud” schemes, you are encouraged to visit the U.S. Secret Service Web site at: http://www.secretservice.gov/.
The NBA often fields questions regarding the need to file “Suspicious Activity Reports” (SARs) on all Nigerian originated 419 scams. We have been advised by federal financial regulators that a bank need file a SAR only in those instances where such a scam actually results in a loss to your institution or a customer exceeding $25,000.
III. EDUCATING CUSTOMERS
The FBI has issued the following “Tips to Avoid International Mass Marketing Fraud.”
Individuals receiving these letters or other forms of solicitations may also report the activity to their local FBI Field Office. The telephone numbers are located in local telephone books and may also be obtained on the Internet by accessing the FBI’s official Homepage: http://www.fbi.gov/. Additionally, the information can be reported to the Internet Crime Complaint Center (IC3) via the FBI homepage.
The NBA has also developed the following customer information brochure that may be used as a “statement stuffer” regarding these types of fraudulent schemes. The brochure is reproduced below.
Beware Of Nigerian Fraud Letters
Nigerian Advance Fee Fraud: You May Be A Potential Victim!
You have just received an official-looking letter from a foreign country with an offer to enter into a confidential “business arrange-ment.” This arrangement is supposedly going to result in millions of dollars being put into your bank account. Beware: You may be a potential victim, not a potential millionaire! It’s called the Nigerian Advance Fee Fraud.
If you think people you know won’t be seduced by such a scheme, think again! It’s happening all over the country—including Nebraska—with losses from these scam operations estimated at more than $1 million every single day in the U.S. alone.
Delivered via regular mail, fax, or e-mail, Nigerian Advance Fee Fraud letters have been circulating in the U.S. since the mid-1980s. New variations of the letter are being developed all the time—from the transfer of funds from “over-invoiced” contracts and assistance in escaping the country with accumulated wealth to contract fraud and the sale of crude oil, among others. Some victims may even be invited to travel to Nigeria to complete the transaction of funds. On one such trip in 1995, an American businessman was murdered, according to the U.S. State Department, and others have been held against their will.
Advice For Consumers
Web Sites With More Information
U.S.State Department: www.state.gov
Crimes of Persuasion: www.crimes-of-persuasion.com
The 419 Coalition: home.rica.net/alphae/419coal
InternetFraud Complaint Center: http://www.ic3.gov/default.aspx
U.S.Secret Service: www.secretservice.gov/
This information is provided by your local bank and the Nebraska Bankers Association.