Financial Crime World

Nigerian Scams: A Multi-Million Dollar Enterprise that Persists in Deceiving Vicitms

Nigerian scams, also known as “419 scams,” are a form of advanced fee fraud that continue to trick unsuspecting individuals and companies out of millions of dollars each year. These scams, which originated in Nigeria, have become a persisting problem that exploits the prospect of acquiring large sums of unclaimed funds.

Origins of Nigerian Scams

Fraudsters pose as officials from the Nigerian government or various businesses and contact foreign entities with a proposal to recover supposedly untouched funds. Below are somecommon backgrounds used to lure victims into these elaborate scams:

  • Nigerian Central Bank
  • Nigerian National Petroleum Corporation
  • Other reputable institutions

By exploiting the temptation of acquiring vast sums of money, scammers lure victims into sharing their personal banking details or contributing fees to facilitate the transaction. In return, victims are promised a substantial share of the recovered funds.

Common Tactics

Scammers use various tactics to target their victims. Some common methods include:

  • Describing political instability or persecution in Africa and offering assistance
  • Explaining the existence of untouched funds in a Nigerian bank account

Here is an example of an email illustrating such tactics:

“I am MR.XXX XXX, an Auditor in Algergermated Bank of South Africa (ABSA). There is an account opened in this bank in 1980, and since 1990, no one has operated on this account again. After some old files in the records, I discovered that if I do not remit this money out urgently, it would be forfeited for nothing. No other person knows about this account, nor anything concerning it. The account has no other beneficiary, and my investigation proved that his company does not know anything about this account and the amount involved, which is (USD$ 10M) Ten million United States Dollars. I am contacting you as a foreigner because this money cannot be approved to a local bank here but can only be approved to any foreign account as the money is in U.S. dollars and the former owner of the account is a foreigner too. I know that this message comes to you as a surprise to us. Send also your private telephone and fax number, as well as the full details of the account to be used for deposit. I want us to meet face to face or sign a binding agreement to bind us together so that you can receive this money into a foreign account or any account of your choice where the fund will be safe. I will fly to your country for withdrawal and sharing and other investments, and at the conclusion of this business, you will be given 25% of the total amount, 70% will be for me, and 5% will be for expenses both parties might have incurred during the transfer process.”

Consequences and Prevalence

These enticing promises of significant profits have led thousands of victims into losses, estimated in the hundreds of millions of dollars. According to the Internet Crime Complaint Center, in 2005:

  • Nigerian scams accounted for the highest losses per incident ($5,000) of any reported Internet-related financial crime
  • There was a staggering 60% increase in losses compared to 2004

The Dutch private investigation firm, Kroll, reported that:

  • US companies and individuals lost $720 million
  • UK consumers lost approximately $520 million
  • The total losses from 37 countries in 2005 approached $3.2 billion
  • 71% of Nigerian scam criminals were residing in the US
  • Nigeria accounted for the next highest portion, 7.9%

Reporting Nigerian Scams

If you have become a victim of a Nigerian scam, it is essential to report the incident to:

  • The Criminal Investigative Division of the U.S. Secret Service, Office of Homeland Security
  • Your local Secret Service office
  • The Federal Trade Commission via email at [email protected]

Send correspondence to the U.S. Secret Service by mail:

  • Label as “No Financial Loss - For Your Database” if there is no financial loss
  • Label as “Loss” if there is significant financial loss

Send by mail to the U.S. Secret Service, Criminal Investigative Division, 950 H Street NW, Washington, D.C. 20223

For more information on Nigerian fraud scams, visit the Secret Service website.