ERxplained: How the Money Transfer and Bank Account Frauds - Nigerian and Dutch Frauds Work

How the Money Transfer and Bank Account Frauds - So-called "Nigerian", "419" and "Dutch" Scams Work

What is the "Nigerian letter" scam?

The Nigerian letter scam, as it is commonly called, is an advanced fee type of fraud. The Advance Fee Fraud (AFF) email is also known as "419",  named for the violation of Section 419 of the Nigerian Criminal Code. It is sent unsolicited by mail, fax, or most commonly by email, in the form of a letter. Although letters come from around the world, the most common varieties relate to funds held in or taken from West African nations such as Nigeria.  

The letter explains that the writer (scammer) needs to access a foreign bank account that can be used to transfer money through. The amount of money usually mentioned is upwards of US$10 million. All that's needed are details of your bank account and a few blank pages of letterhead if you're a company. In return you are offered an opportunity to share in the millions. Many refer to political events or major disasters, which is often how the writer came to have access to such funds.

Detailed Explanation

After a victim responds (positively) to an AFF letter by sending the required documentation (for example, signed company letterheads, bank account number, etc.) the bait is set. The primary reason for the documentation is not to rob the victim's bank account, but to create the illusion that the deal is legitimate and moving forward. The blank signed letterheads are merely altered and used by the criminals as props in other frauds, letters of reference to obtain visas, or sold to
other AFF criminals.

For the next week to 10 days, the perpetrators establish a level of trust with the victim. This is accomplished by sending the victim more
and more "official" documentation verifying the bona fides of the deal and the people involved. The criminals will correspond with the victim mostly via fax machines and courier mail because it is difficult to trace.

The criminals usually conduct the scams from their homes or other locations (front companies). To ensure the integrity of the phone lines at those locations, they will gain access to active telephone lines. The telephone lines were either abandoned by the owner who could no longer afford it, or are used without the knowledge or consent of the owner. Therefore, a criminal will use a phone line that is registered to
someone living in another part of the city, making it almost impossible to trace.

Delays that Cost

What happens next is the most crucial point in the fraud and can take a number of directions. A victim will be advised that the deal is near completion, however, an emergency has arisen or there is another form to be processed and money is needed to pay an unforeseen government fee or tax before the money can be released.

If the fee is paid, the criminals will come up with another "problem" that requires immediate payment by the victim. Each "problem"
is supported by "official" documentation.

The criminals will continue this game for months or even years, depending on the gullibility of the victim or his or her desperation to recoup losses. One Western diplomat described it as ". . . kind of like gambling. You get in so deep you keep putting money in to get something out of it."

At some point during the fraud, the criminals will attempt to have the victim travel to Nigeria or a bordering country to finalize the contract, money transfer, or other transaction. If the victim appears reluctant to go to Nigeria, the criminals will suggest a neutral country where an AFF team, unbeknownst to the victim, is already established. The AFF team will not target a victim in the victim's own country where they have established roots and can easily check on the validity of the scam.

Travel to Nigeria

In some instances, prior to coming to Nigeria, the criminals will tell a victim to bring expensive watches, pens, and men's suits as "gifts." Proceeds from these items are, of course, kept by the criminals.

The criminals may tell the victim that a visa is not required to enter Nigeria, or a visa has been arranged to be issued upon arrival. Without exception, a valid Nigerian visa is required for entry and departure, and airport visas are not available. Travel to abroad should never be undertaken without first verifying the bona fides of a company or business partners.

If a victim meets the criminals in a bordering country, the victim may find that he or she still must travel to Lagos. Entry without a visa, gives
the criminals leverage over the victim and leads to other forms of extortion. Once in Lagos, the victim will be housed in one of the many small hotels (euphemistically known as "419" hotels), located primarily around Murtala Muhammad Airport.

At this point, the victim is totally immersed in the scam, and the criminals have total control over the victim's every move. The victim is taken to meetings with criminals posing as Nigerian Government officials, or possibly even corrupt real government officials, to finalize the deal. The meetings can take place in government offices or
annexes that are "rented" by the criminals or in a office that is setup to resemble a government office. These offices are often located near government buildings to add authenticity to the fraud.

If the victim is sufficiently duped by this elaborate ruse, he or she returns home unharmed and the scam continues. However, if the victim decides not to pay additional payments and/or sign a contract, the victim will be subjected to threats and physical abuse until he or she arranges for more payments.

Travel to a Neutral Country

If the victim is reluctant to go to Nigeria, the criminals will suggest a neutral country where a team is already established. The victim will be requested to provide them with his or her flight itinerary and the name of the hotel he or she will be staying.

This is the first step in controlling the victim's movements during the scam. Operating under the guise that the business contacts are in Nigeria, the criminals will have the victim send roundtrip airline tickets from Lagos to the neutral country for face-to-face meetings with business contacts. The victim is also requested to reserve hotel rooms in his or her name for the contacts. The hotel rooms are never in the
same hotel as the victim's. The criminals will cash the airline tickets, and use the hotel rooms, which are reserved under the name of a legitimate business person, or his or her company, in other scams or sell to another AFF criminals.

Surprisingly, nine out of ten victims comply with this request.

Meetings will be setup in areas of the city unfamiliar to the victim. To keep the victim off balance and allow the criminals time to conduct countersurveillance, the criminals will schedule and cancel a number of meetings with the victim.

If the victim decides not to pursue the "deal" or at some point during a scam, the victim stops paying, the criminals will not walk away from the victim. They will attempt to continue the fraud or try a different fraud using various ruses.

The AFF criminals might pose as Nigerian Government officials attempting to get the victim's money back or try to convince the victim that they are the legitimate government officials and the other men he or she dealt with were frauds.

How to Recognize the AFF Scam

All AFF proposals share a common thread. The proposals are unsolicited, emphasize the urgency and confidentiality of the deal, and require the victim to pay various government and legal fees and taxes before receiving what turns out to be nonexistent money.