The 411 on 419 fraud schemes.(SELECTED TOPIC)(foreign companies management)

In today's high-tech world, the exchange of information happens almost instantaneously. The clearinghouse for this information exchange is, of course, our e-mail servers--compliments of the Internet. The critical information we receive ranges from current events related to our businesses, to health matters as well as other personal matters. Unfortunately, we also receive advertisements and other spare notices, which clutter our in-box. But, somewhere in between, there lurk messages from individuals whose primary goal is to defraud you and/or your company from your identity and financial resources.

We all have been lucky in our lives at one time or another--from finding a dollar on the sidewalk to getting tickets to a sold-out sporting event. However, when we see messages from an unknown individual or entity soliciting our help and assistance from a foreign land, we should not assume that "Lady Luck" sent that message. More times than not, you have been targeted to be a potential victim of a 419 scheme.

The 419 Scheme, also known as an Advance Fee Fraud (AFF), has been used to defraud individuals for many years. The scheme is named "419" after section 419 of the Nigerian Penal Code, which addresses the criminality of fraud and theft. 419 fraud schemes and campaigns are often very creative and innovative. While seemingly ridiculous, this type of fraud is unfortunately growing in effectiveness. Potential victims are recruited from a variety of sources, including trade journals, professional directories, newspapers, chat rooms, recruiting firms and commercial libraries. With this in mind, the scare artist will eventually make contact with someone who may be skeptical about the scenario but desperately wants the deal to be genuine.

A typical scam works like this:

An individual or company receives an e-mail letter or fax from someone representing themselves as an "official" from a foreign government or agency. This "official" offers to transfer millions of dollars in "over-invoiced contract" funds into your business or personal bank account. You may be asked to travel overseas to complete the transaction. The "official" requests blank company letterhead, forms, banking account information and telephone/facsimile numbers: in turn, you receive numerous documents with authentic looking stamps, seals and embossing to seemingly corroborate the authenticity of the transaction. You will likely be asked to provide advance fees for taxes, attorney fees or transaction costs.

The scenario where most victims fall prey is the AFF fund transfer scare, whereby a company or individual receives an unsolicited letter by mail from an individual claiming to be a senior civil servant of the government of Nigeria. The government official's letter explains that he is seeking a reputable foreign company or individual willing to lend a bank account into which funds ranging from $10-$60 million can be deposited. The money is said to be the result of an overpayment on some type of procurement contract made by the Nigerian government. If the recipient of these solicitations agrees to assist, they are normally paid a healthy commission of up to 30 percent.

The victim's letterhead is used to forge letters of recommendation to other victim companies and to seek out a travel visa from the American Embassy in Lagos. The victim is then instructed to complete the contracts, which ...