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     overview

This note considers the 'Nigerian Advance Fee' or '419' scam, email offers to cut you in on illicit disposal of loot supposedly secreted by African mass murderers or petrodollar czars.

It covers -

• introduction - what is the 419 Scam?
• evolution - the history of 'advance fee' fraud from the late Middle Ages to the internet era
• basis - how does the scam operate?
• statistics - how many messages, how much money
• regulation and scam baiting - action by governments
• studies - research into the sociology and restriction of the Nigerian Advance Fee fraud

The page supplements discussion elewhere on this site regarding Email and messaging, Identity Theft/Fraud, Security & InfoCrime and Consumers.

     introduction

The 'Nigerian Advance Fee' frauds (often known as the 419 scam, after the corresponding section of the Nigerian penal code) typically involve receipt of an unsolicited letter, fax or email that is claimed to come from

• the heir/associate of a notable (eg African and Asian politicians such as Nigerian President Abacha, Congo's Laurent Kabila and Mobutu or Philippines President Marcos) with illicit wealth in an unfriendly jurisdiction
• from someone in a financial institution with access to that wealth
• a government official or individual in a financial institution with with access to other funds from, for example, unclaimed estates or corporate overpayments.

The recipient is asked to assist in transferring the funds to a friendlier jurisdiction, generally to the recipient's personal bank account, with the promise of receiving 5% to 30% of the proceeds. If the recipient responds to initial contact the scammer invites the person to travel overseas to complete the transaction in person or merely exchanges correspondence, sometimes featuring impressive-looking stamps and letterhead. At some stage the scammer reports either a hitch - typically an official has to be bribed - or requires the recipient to provide money for processing and other fees. That provision of funds, rather than supplying details of the recipient's bank accounts, is generally the purpose of the scam.

Examined objectively the fraud sounds deeply implausible - why would Yasser Arafat's widow ask you, a total stranger, to launder her loot - but it is a scam that judging by complaints to regulatory agencies appears to have gulled a considerable number of people. Some individuals have made substantial payments to 419 scammers. Others have travelled to unlovely locales such as Port Harcourt or Lagos to consumate the supposed transfer, on occasion being grabbed by gangs or entertained by visits to 'government offices'.

     evolution

Precursors of the email scam can be traced back several centuries, with the so-called Turkish Letter and Spanish Letter frauds of the late Middle Ages and Renaissance. Victims were induced to hand over money by promises that they would share in the wealth of a merchant or noble who had been imprisoned by the Moors, Spanish Inquisition, Khedive of Egypt or Ottoman Sultan and needed money to bribe the guards or pay a ransom. Some people found such stories more credible than requests for final-stage funding of research into alchemy.

A rash of Russian Letters appeared in the 1920s, with money supposedly needed to rescue people held by the Bolsheviks. Drake's Fortune: The Fabulous True Story of the World's Greatest Confidence Artist (New York: Doubleday 2002) by Richard Rayner, highlighted elsewhere on this site, profiles conman Oscar Hartzell, who used agents to relieve several thousand greedy fools of money for 'legal fees' to unlock the supposed vast estate of Elizabethan explorer Sir Francis Drake. In the 1950s and 1960s some cons sought advance payment for retrieving supposedly sunken SS or Mussolini gold from lakes in Austria and North Italy.

Nigeria came to the attention of the public and regulators during the 1970s over letters - generally aimed at small businesses rather than individuals - purporting to come from figures in the Nigerian government (often the Central Bank or Nigerian National Petroleum Corporation) wanting help disposing of new oil wealth. Those letters were posted in Africa and Europe. In 2002 the US Department of Justice gained a court order to open every item of mail from Nigeria passing through JFK airport in New York, with around 70% involving scam offers. Russell Smith notes (PDF) that between August and November 1998 Australia Post confiscated 4.5 tonnes of advance fee correspondence (1.8 million items) that had counterfeit postage.

Uptake of faxes during the 1980s and 1990s saw the scammers move from print to fax messaging. That was followed by an explosion of email at the end of the millennium, with the scammers spamming recipients in advanced economies (primarily those in English-speaking nations). The addressing of that email was indiscriminate, encompassing organisations and personal addresses.

     basis

The 419 scam reflects costs (eg how much does it take to identify, contact and 'groom' victims; what inducements are necessary to ensure the complaisance of people in financial institutions or regulatory agencies), benefits (how much money can be extracted from the victims), success rates and risks (what is the likelihood of detection and successful prosecution by a local or foreign law enforcement agency).

While human greed and gullibility do not seem have changed substantially, the net has altered the economics of the advance fee business. It is for example estimated that 419 spammers need only a 1% success rate to make a profit and that an individual could easily send around 100,000 messages a day.

Prior to the mid-1980s when identifying and contacting potential victims was labour intensive the scammers used business directories, trade journals and other publications. Advent of the fax saw purchase or theft of electronic directories or rekeying or print directories. More recently the scammers have purchased email lists (eg disks with large-scale collections of names that are promoted by spam) or have trawled the net in search of names. As with other spam, if your address has appeared on the web you are likely to get an offer to engage in money laundering.

The location of the 419 scammers is uncertain. Email forensics suggest that some indeed operate out of Nigeria, with many apparently using cybercafes, academic institutions and even government offices. Some are domiciled in Europe or other parts of Africa. In 2004 for example three people from Nigeria and three from Benin were convicted in Amsterdam for defrauding victims of several million dollars, including a Swiss professor who lost US$482,000 after being promised 25% of US$36 million.

The Nigerian Government blames mass unemployment and poverty, extended family systems, a get rich quick syndrome, and - with some justice - both the greed and stupidity of foreigners. A UK Metropolitan Police alert aptly warns that "if it sounds too good to be true, then it is!". We have elsewhere commented that if an offer from Lagos or Port Harcourt seems too good to be true it will not become legitimate merely through delivery online.

     statistics

Statistics about the 419 are problematical: perpetrators do not publish information on their demographics or revenue, victims often do not report their losses, successful prosecutions are rare, media coverage is often uncritical.

A UK presentation at the 2002 International Conference on Advance Fee (419) Frauds reportedly claimed that around 1% of

the millions of people who receive 419 e-mails and faxes are successfully scammed. Annual losses to the scam in the United States total more than $100 million, and law enforcement officials believe global losses may total over $1.5 billion.

The US National White Collar Crime Center and FBI Internet Fraud Complaint Center (IFCC) 2001 Internet Fraud Report (PDF) indicated that 419 fraud cases amount to 15.5% of reported grievances, with only one in ten crimes being reported. The median loss was US$5575, compared to a median for all internet fraud of US$435.

Harvey Glickman's insightful The Nigerian "419" Advance Fee Scams: Prank or Peril? (PDF) analysed a set of 419 email messages, which supposedly came from

Nigeria 80 (41%)
South Africa 35 (18%)
Sierra Leone 16 (8%)
Zaire 11 (6%)
Zimbabwe 10 (5%)

and were attributed to -

64 from widows, heirs, or someone representing
4 from ex-military, most of these numbers rolled into governmental officials as a category
67 from governmental officials
53 bank officials/accountants
2 other company officials

Supposed sources of funds vary by recipient. Our tabulation of 512 offers over June 2004 to June 2005 is as follows

basis air crash car accident tsunami/earthquake coup over-invoiced undisclosed sender lawyer widow child bank officer

% 36 12 3 24 15 10 35 31 11 23

     regulation and scambaiting

Regulation in advanced economies has centred on warnings to potential victims and, more subtly, on diplomatic pressure against states such as Nigeria that are perceived to be lax in controlling scammers (eg by not assisting US officials tracking money flows). As with much online information crime, enforcement frequently involves multiple agencies and action across borders.

The Nigerian federal government belatedly established an Economic & Financial Crimes Commission (EFCC) to

curb the menace of corruption that constitutes the cog in the wheel of progress; protect national and foreign investments in the country; imbue the spirit of hard work in the citizenry and discourage ill gotten wealth; identify illegally acquired wealth and confiscate it; build an upright workforce in both public and private sectors of the economy and; contribute to the global war against financial crimes

In practice that body has been mired in Nigeria's murky politics and made little progress in systemic reform of the nation's kleptocracy, which as the EFCC lamented in June 2005 had "stolen or squandered" a mere £220 billion foreign aid between 1960 and 1999.

Government warnings include -

US Treasury Advance Fee Fraud Advisory page

US Federal Trade Commission Consumer Alert - The 'Nigerian' Scam: Costly Compassion

US Department of State - Bureau of International Narcotics & Law Enforcement Affairs Publication 10465 - Nigerian Advance Fee Fraud (PDF), which comments that 25 tourist murders or disappearances have been directly linked to 419; other people have been beaten, held against their will or blackmailed

Private responses include scam baiting, misleading the scammers.

     studies

The 419 scam has attracted surprisingly little scholarly attention. Exceptions include Andrew Apter's lucid 'IBB=419: Nigerian Democracy and the Politics of Illusion' in Civil Society & the Political Imagination in Africa (Chicago: Uni of Chicago Press 1999) edited by John Comaroff & Jean Comaroff, Pauline Reich's 2004 Cybercrime : advance fee scans in-country and across borders (PDF) and the 1999 Nigerian advance fee fraud study (PDF) by Russell Smith, Michael Holmes & Philip Kaufman.

The bibliography for Glickman's paper, noted above, offers a valuable point of entry into the literature.

Douglas Cruickshank's 2001 I crave your distinguished indulgence (and all your cash) article offers an irreverent view of the genre.

The Informant (New York: 2000) by Kurt Eichenwald covers the fall of Archer Daniels Midland executive Mark Whitacre, whose misdemeanours started when he fell for a 419 scam.

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