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Saturday, April 12, 2008

Nigerian Internet Fraud

If you have ever received an e-mail informing you that you have just won the lottery in a foreign country or that someone needs to transfer a large sum of money into your bank account, you have most likely been contacted by an internet scam artist. Internet scams have been on the rise every year since the internet began. This type of fraud cost Americans $198 million in 2006, and this figure is 8% larger than the total of 183 million the year before. Most of these losses are attributed to the Nigerian 419 scam. The recent popularity of this type on internet fraud has created much concern by U.S. government agencies and private organizations.

The Nigerian Letter or "419" is the most prevalent internet scam. This type of scam gets its name because it originated in Nigeria, "a West African country," and it's Section 419 of the Nigerian criminal code deals with fraud. This internet scam starts out with an e-mail from an anonymous person who needs the recipient's help transferring millions of dollars from the bank account of a deceased African leader, company official, or senior government bureaucrat. The e-mail recipient will receive a sizable percentage of cash by helping him do so. These letters then ask you for your personal information, such as your bank account number and bank letterhead.

Most people, when they receive this letter, may ask themselves, "Who would fall for such a scam," However, for some individuals, this letter is perceived as a fantastic opportunity. The promise to make a large sum of money fast can drive people to make irrational decisions concerning their private information. In 2006 these types of scams had an average $5,100 loss for victims. That is a substantial jump from 2004 when the average was $2,100 per incident.

These letters are sent out to millions of e-mail addresses every year. Even though millions of e-mails are sent, just a few responses are needed for a big return. Letters to avoid

1. Having consulted with my colleagues and based on the information gathered from the Nigerian Chambers Of Commerce And Industry, I have the privilege to request your assistance to transfer the sum of $47,500,000.00 (forty seven million, five hundred thousand United States dollars) into your accounts. The above sum resulted from an over-invoiced contract, executed, commissioned and paid for about five years (5) ago by a foreign contractor. This action was however intentional and since then the fund has been in a suspense account at The Central Bank Of Nigeria Apex Bank.

We are now ready to transfer the fund overseas and that is where you come in. It is important to inform you that as civil servants, we are forbidden to operate a foreign account; that is why we require your assistance. The total sum will be shared as follows: 70% for us, 25% for you and 5% for local and international expenses incidental to the transfer.

The transfer is risk free on both sides. I am an accountant with the Nigerian National Petroleum Corporation (NNPC). If you find this proposal acceptable, we shall require the following documents:

2. I have been requested by the Nigerian National Petroleum Company to contact you for assistance in resolving a matter. The Nigerian National Petroleum Company has recently concluded a large number of contracts for oil exploration in the sub-Sahara region. The contracts have immediately produced moneys equaling US$40,000,000. The Nigerian National Petroleum Company is desirous of oil exploration in other parts of the world, however, because of certain regulations of the Nigerian Government, it is unable to move these funds to another region.

You assistance is requested as a non-Nigerian citizen to assist the Nigerian National Petroleum Company, and also the Central Bank of Nigeria, in moving these funds out of Nigeria. If the funds can be transferred to your name, in your United States account, then you can forward the funds as directed by the Nigerian National Petroleum Company. In exchange for your accommodating services, the Nigerian National Petroleum Company would agree to allow you to retain 10%, or US$4 million of this amount.

However, to be a legitimate transferee of these moneys according to Nigerian law, you must presently be a depositor of at least US$100,000 in a Nigerian bank which is regulated by the Central Bank of Nigeria.

If it will be possible for you to assist us, we would be most grateful. We suggest that you meet with us in person in Lagos, and that during your visit I introduce you to the representatives of the Nigerian National Petroleum Company, as well as with certain officials of the Central Bank of Nigeria.

3. We have the pleasure to make this surprising but mutually benefiting business proposal. I am a member of the newly inaugurated committee for the privatization of the refineries of the Nigerian National Petroleum Corporation, in Nigeria. The members of the committee are interested in the importation of goods into the country with funds presently floating in the Central Bank of Nigeria / Nigerian National Petroleum Corporation (NNPC) foreign payments account. I got your address through the office of the Nigerian Chamber of Commerce and Industry.

The federal military government of Nigeria, intends to lease the three existing petroleum refineries to private individuals and companies. This is to make the refineries more viable, resourceful and to eliminate undue wastage and fraud. This privatization is in-line with the recommendations of the World Bank and International Monetary Fund (IMF) as a prerequisite for future financial assistance.

The refineries are heavily indebted to many companies and my committee has the mandate (task) of compiling the names of these companies and debt owed them and also recommend for payment, all contracts that have been fully executed. With our position in the committee, which comprises of my ministry, federal ministry of petroleum resources, Nigerian National Petroleum corporation (NNPC), the federal Ministry of Finance (FMF) and the Central Bank of Nigeria (CBN), we have successfully secured for ourselves, the sum of US $73,000,000 (seventy-three million United States Dollars). This sum was acquired by carefully inflating the amount of indebtedness by this amount (US $73,000,000). We need a reliable company to be included in the list of companies to be paid. This company will be paid for a contract executed in Kaduna Refinery in 1993.

I was therefore mandated in trust by members of the committee, to seek a foreign partner into whose account we could transfer the sum of US $73,000,000, hence I am writing you this letter. We have agreed to share the funds thus:

Since the scammers are usually located in Nigeria, prosecutions of individuals who commit these crimes are not likely to come to fruition. In 2006, the 419 letter accounted for 8% of all internet fraud. Statistics show that only 45% of victims report these crimes to anti-fraud agencies. Some of these crimes never get reported because the victims are either too embarrassed or they have been threatened with violence. The majority of victims tend to be male (61%) and are an, average 30 to 40 years old. The top three states from which most complaints come are California, Texas, and Florida.

The best ways to avoid being caught in one of these types of internet frauds are prevention and knowledge. The FBI provides information about how not to become a victim of a Nigerian internet fraud.

o If you receive a letter from Nigeria asking you to send personal or banking information, do not reply in any manner. Send the letter to the U.S. Secret Service or the FBI. o If you know someone who is participating in one of these schemes, encourage that person to contact the FBI or the U.S. Secret Service as soon as possible. o Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts. o Do not believe the promise of large sums of money for your cooperation. o Guard your account information carefully.

The U.S. and Nigerian authorities have been cracking down on the perpetrators of the 419 scam.

The U.S. has been pressuring Nigerian authorities to implement new procedures to find and apprehend these internet fraudsters. In 2005 Nigeria created the Economic and Financial Crimes Commission (EFCC). It is designed as a way to target not just the scammer, but the ring around the scammer. This includes banks, owners of cyber cafés, even café-building landlords. However, this problem has proven to be more widespread then just internet cafes. In Nigeria, there is a huge problem with corruption in the government, and some feel that internet scams are in the nation's best interest because they provid money for the economy. But this is not the only concern expressed by U.S. officials. As the Nigerian government begins to crack down, these internet scammers are moving into neighboring countries like Benin, where there is little to no government control. Also, even if the 419 becomes less profitable, scammers are conjuring up new types of internet fraud like online actions.

In conclusion, these types of fraudulent activates can be prevented by being aware and being skeptical of any e-mail makes and offer that is too good to be true because it probably is. Nigerian e-mail scams will be a problem for many years to come, but new programs preventing these types of e-mails from getting to your account are being used by most e-mail providers. Case Citations

(2006). Common Fraud Schemes. Retrieved November 5, 2007, from Federal Bureau of Investigation Web site:

(2004). Nigerian Advance Fee 419 Fraud advanced fee internet e-mail web scams from South Africa & West African / Ivory Coast / Nigerian National Petroleum Corporation frauds.. Retrieved November 5, 2007, from Web site:

Eric, Rosenberg (March 31, 2007). U.S. Internet fraud at all-time high. Retrieved November 5, 2007, from Web site:

(2006). The Internet Crime . Retrieved November 5, 2007, from Federal Bureau of Investigation (FBI) and the National WhiteCollar Crime Center (NW3C) Web site:

If you think you've become a victim of identity theft or fraud, act immediately to minimize the damage to your personal funds and financial accounts, as well as your reputation. Here's a list -- based in part on a checklist prepared by the California Public Interest Research Group (CalPIRG) and the Privacy Rights Clearinghouse -- of some actions that you should take right away:

1. Contact the Federal Trade Commission (FTC) to report the situation, whether --

2. Online,

3. By telephone toll-free at 1-877-ID THEFT (877-438-4338) or TDD at 202-326-2502, or

4. By mail to Consumer Response Center, FTC, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

Under the Identity Theft and Assumption Deterrence Act , the Federal Trade Commission is responsible for receiving and processing complaints from people who believe they may be victims of identity theft, providing informational materials to those people, and referring those complaints to appropriate entities, including the major credit reporting agencies and law enforcement agencies. For further information, please check the FTC's identity theft Web pages . You can also call your local office of the FBI or the U.S. Secret Service to report crimes relating to identity theft and fraud.


John P. Fadoul

A South Florida native

In December 2007 graduate from Florida Atlantic University with a Bachelors of Business Administration in Accounting

He has a passion for accounting and has the knowledge to apply analytical procedures to complex problems. He love to help and always makes time for is anybody that needs a helping hand.

Currently he sitting for the CPA exam in Vermont board

If you with to contact John Fadoul

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