Ordinary households have recently been taken in by fraudulent international bond scams, with some people losing their life savings. The schemes claim to offer investments in international bond trading including "bank bond trading programs", "prime bank debenture trades" and "contractual international private placement bonds". A typical scam claims that the top 25 banks, US Treasury or governments secretly trade in these bank instruments so the tremendous profits are only available to insiders. Potential investors are invariably sworn to secrecy.
Most of the schemes promoted in New South Wales, including the International Benevolent Fund Trust (IBF), Direct Link Group, World Investment to Nurture Grow and Sustain, have been marketed through word of mouth, church and community groups and offer up to 2000 per cent return a year. The IBF scheme claims to have been set up by a pastor in the USA who knows the secret of how banks make their money. People are pressured to invest in the IBF by contacts in religious groups. As is common with such schemes, investors are required to sign an agreement in which they agree to use IBF exclusively for investment and to keep the identities of the parties to the investment confidential. When last heard of, the IBF had received at least $100,000 by a promoter in Sydney. The promoter of the scam in the USA is under investigation by the Alabama Securities Commission and Federal Authorities.
The U.S. Federal Trade Commission (FTC) has released the following list of the 12 most common scams found in unsolicited commercial e-mail (or spam).
Business Opportunity Scams - Most of these scams promise a lot of income for a small investment of time and money. Some are actually old-fashioned pyramid schemes in disguise.
Making Money By Sending Bulk E-mailings - These schemes claim that you can make a lot of money sending your own solicitations via bulk e-mail. They sell lists of e-mail addresses or software to allow you to make the mailings. What they do not mention is that the lists are of poor quality; sending bulk e-mail violates the terms of service of most Internet service providers; virtually no legitimate businesses engage in bulk e-mailings.
Chain Letters - These electronic versions of the old-fashioned chain letters usually arrive with outrageous promises about money-making opportunities. Like their paper counterparts, these electronic messages also are illegal.
Work-At-Home Schemes - The e-mail messages offer the chance to earn money in the comfort of your own home. Two popular versions, according to the FTC, pitch envelope stuffing and craft assembly. But nobody will really pay you for stuffing envelopes and craft assembly promoters usually refuse to buy the crafts, claiming the work does not meet their "quality standards".
Health and Diet Scams - These offer "scientific breakthroughs", "miraculous cures", "exclusive products", "secret formulas", and "ancient ingredients". Some come with testimonials from "cured" consumers or endorsements from untraceable "famous medical experts".
Easy Money - Offers such as "Learn how to make $4,000 in one day" or "Make unlimited profits exchanging money on world currency markets" appeal to the desire to "get rich quick".
Get Something Free - The lure of valuable, free items - computers or long-distance phone cards, for example - get consumers to pay membership fees to sign up with these scams. After they pay the fee, consumers learn that they don't qualify for the "free gift" until they recruit other "members".
Investment Opportunities - These scams may tout outrageously high rates of return with no risk. Glib, resourceful promoters suggest they have high-level financial connections, that they are privy to inside information or that they guarantee the investment. To close the deal, they may serve up phony statistics, misrepresent the significance of a current event or stress the unique quality of their offering.
Cable Descrambler Kits - For a small initial investment you can buy a cable descrambler kit so you can receive cable without paying the subscription and monthly utilization fees.
Guaranteed Loans or Credit, On Easy Terms - Some offer home equity loans, even if you don't have any equity in your home. Others offer guaranteed, unsecured credit cards, regardless of your credit history. The "loans" turn out to be lists of lending institutions and the credit cards never arrive.
Credit Repair Scams - These scams target consumers with poor credit records. For an upfront fee, they offer to clear up a bad credit record - for a fee - or give you a completely clean credit slate.
Vacation Prize Promotions - Like their snailmail counterparts, these e-mail "prize promotions" tell consumers they have been selected to receive a "luxury" vacation at a bargain-basement price. But the accommodations aren't deluxe and upgrades are expensive.
The Royal Canadian Mounted Police (RCMP) have received reports that Internet users are receiving deceptive e-mail messages. These messages advise you that an order for goods in the amounts of hundreds of dollars will be billed to your credit card. To cancel the order (that has never been placed), the recipient is advised to call the telephone number on the screen immediately. The international telephone call will show up on your phone bill some time later. The scheme is a combination of spamming and telecommunications fraud.
The majority of business firms in Nigeria are legitimate and respectable. Nigeria is the United States' largest trading partner in sub-Saharan Africa, and many U.S. companies have considerable investments in the country. However the minority of individuals in Nigeria who are part of illegal activities have begun to overshadow the operations of the majority. Fraudulent and corrupt business solicitations by Nigerian companies and individuals have overwhelmed U.S. and foreign companies for many years. The key is to be informed and cautious so you don't become the next victim of these various scams.
Money Transfer and Government Contract Schemes
The most prevalent occurrence of Nigerian fraud involves money transfer schemes. These typically attempt to involve foreign firms or individuals in supposed efforts to defraud the Nigerian Government. The fraud perpetrators propose to transfer large amounts of U.S. money (usually millions of dollars) to an overseas account that is owned by a foreign firm. The firm owning the account is told it will receive a percentage of the transferred funds as "commission." The money is sometimes described as an overpayment from previous government contracts, or may be described as advance payment for a government contract that has just been awarded to the U.S. company. These solicitations request account information about the company's bank, as well as blank, signed company letterhead and proforma invoices.
The U.S. firm is sometimes solicited for a "transaction fee" to enable the supposed transfer of funds. The victim may be strung along for up to a year, paying various "fees" which add up to thousands of dollars, before realizing that the promised funds do not actually exist. Letterhead and bank information is also used to extract money from the bank account of the U.S. business.
Variations of the Money Transfer Scheme:
Charity Scams - Charities, non-profits and religious groups are targeted and receive letters from Nigerians who are sympathetic to the group's cause.
Will Scams - Individuals and churches are led to believe that a long lost relative, missionary, or classmate has died and left them a small fortune in a will.
Real Estate Scams - Real Estate Agents are singled out and duped into helping the perpetrator (posing as a retiring government official) to buy a residence or property in the United States.
This type of scam involves the solicitation of large orders for U.S. products. Proposals may request samples for which the writers never intend to pay, or ask the U.S. firm to forward registration or import licensing fees. These fees do not exist and are in reality nothing but an attempt to acquire funds. Only if an American exporter sells to the Nigerian Government through an agent is there a registration fee requirement. When registration fees are legitimately connected to government contracts, they are clearly published by the ministries.
These scam artists may stress the urgency of the transaction and send a fraudulent bank draft as payment in hopes that the victim will ship the order before realizing the draft is false. While in some cases these drafts may be legitimate, it is safer to request payment in the form of a letter of credit. The letter of credit should be confirmed by a reputable financial institution.
The alleged contract details the availability of a "special allocation" by the Nigerian National Petroleum Corporation (NNPC) of crude oil at below market prices. The U.S. firm may be asked to pay a bogus registration or licensing fee with the NNPC or the Ministry of Petroleum Resources. These "special allocations" do not exist. No intermediaries are involved in the sale of Nigerian oil. Unfamiliarity with the petroleum industry in Nigeria should cause U.S. businesses to avoid all proposals potentially harmful to their wellbeing.
Recent Developments and Advisories:
Request for Letters of Invitation
U.S. Companies are advised against writing letters of invitation for Nigerians for presentation to the U.S. Embassy in Lagos requesting that the Embassy grant a visa for travel to the U.S. to finalize business dealings. The Consular Officer at the Embassy makes independent assessments in granting visas (letters of invitation will have no influence).
Corruption of Company Letterhead
U.S. companies should be cautious in sending company letterhead to anyone in which they have not established a relationship with. These documents can be altered and used in fraudulent activities.
Corruption of Company Letterhead
In some instances, letters threatening execution if a set amount of money is not transferred to a specified bank account by a certain date and time have been received but are uncommon. Through diplomatic representation to the Nigerian government, the U.S. government has protested them vigorously.
Increasing Sophistication of Fraud Letters
New scam approaches are evolving frequently. Some scams are blatant and transparent while some are subtle and complex. When these scams are introduced it may consist of more than just a simple business opportunity. Follow-up letters and supporting documentation are common ways for swindlers to convince an unsuspecting victim of falling for fraudulent business activity.
- Requests for blank letterhead and invoices, stamped and signed, as well as bank account information.
- Supposed urgent need for products or samples to be shipped immediately before any payment can be secured/verified.
- Request to ship goods by air freight from stock immediately upon receipt of a "certified bank draft."
- Requests for payment by a U.S. citizen of an alleged Nigerian tax, registration or legal fee, or service charge.
- Promises to the U.S. firm of contracts to supply goods or services to the Nigerian government.
- Requests that correspondence and shipment be sent via air/express courier services, although the solicitation letter came by regular mail.
- Requirement that a U.S. company representative travel to Nigeria to sign contracts and money transfer documents, or that the U.S. company provide power of attorney to a lawyer to sign papers.
- Vague or implausible explanation of how the sender obtained the company's name as a contact.
If a proposal still seems legitimate, after having been carefully checked against all aforementioned characteristics, the U.S. company is urged to run a background information check on the foreign company before sending out a letterhead, invoices or bank account information. This can be done by requesting an International Company Profile (ICP) through a U.S. Department of Commerce Export Assistance Center (Directory: www.ita.doc.gov/uscs)These reports are prepared by the commercial staff at the U.S. Embassy in Nigeria, providing detailed and specific answers to many questions that can verify the legitimacy of companies abroad.
U.S. Companies can report the receipt of a fraudulent business proposal to:
U.S. Secret Service
Financial Crimes Division
1800 G St., NW., Room 942,
Washington , D.C. 20223,
Fax: (202) 435-5031
For help in determining the legitimacy of a business proposal:
Nigeria Desk Officer,
Office of Africa
Room 2037, U.S. Department of Commerce
Washington D.C. 20230
Fax: (202) 482-5198
For further information on Nigerian Business scams, please view the United States Secret Service homepage at www.treas.gov/usss/.
The following pages are actual scam letters sent to U.S. companies from individuals in Nigeria:
DR. P.S. ADAM
NO. 52/54 SHASHA ROAD
LAGOS - NIGERIA. W/A
RE: BUSINESS PROPOSAl/JOINT VENTURE
YOUR GOOD BUSINESS NAME WAS INTRODUCED TO ME BY A BUSINESS CONSULTANT IN MY COUNTRY AND BY UNDERSTANDING THE WORTH OF YOUR BUSINESS AND INTEREST IN YOUR LINE OF PRODUCTS. I DEEM IT NECESSARY TO CORRESPOND AND TELL YOU ABOUT THIS BUSINESS PROPOSAL. BASED ON THIS TRANSACTION, I HAVE THE SAME VIEW OF MUTUAL UNDERSTANDING AND TRUST TO YOU PENDING WHEN I HEAR FROM YOU.
I AM A DIRECTOR IN THE ACCOUNT DEPARTMENT AND MEMBER OF CONTRACT AWARD COMMITTEES IN THE FEDERAL MINISTRY OF PETROLEUM AND MINERAL RESOURCES OF THE FEDERAL GOVERNMENT OF NIGERIA. I IN COLLABORATION WITH MY COLLEAGUES SOME (SENIOR OFFICERS) IN THE CENTRAL BANK OF NIGERIA AND FEDERAL MINISTRY OF FINANCE, HAVE DECIDED TO TRANSFER ABROAD SOME AMOUNT OF MONEY AMOUNTED TO THIRTY MILLION, FIVE HUNDRED THOUSAND U.S. DOLLARS ($30,500,000.00) WHICH WE REALIZED FROM OVER INVOICE CONTRACT AS PER GOODS PURCHASED/SUPPLIED FROM FOREIGN COMPANY. THIS FUND IS NOW DUE FOR FEDERAL GOVERNMENT QUARTER PAYMENT.
AS REGARDS TO YOUR SIMILARITY OF GOODS SUPPLIED. I HAVE BEEN MANDATED TO ARRANGE WITH YOU URGENTLY FOR A POSSIBLE TRANSFER OF THIS FUND, INTO YOUR PERSONAL OR CORPORATE ACCOUNT. AND LATER GO INTO A JOINT VENTURE WITH YOU WITH SOME PART OF THE MONEY.
MEANWHILE, BE ASSURED THAT MODALITIES HAS BEEN WORKED OUT TO EFFECT A SUCCESSFUL HITCH FREE MONEY TRANSFER, WE AS THE OWNER HAS AGREED UPON TO GIVE OUT 30% OF THE FUND AS COMMISSION DUE TO YOU, FOR YOUR ASSISTANCE. WHILE 5% WILL BE MAP OUT TO OFFSET ANY BILL (EXPENSES) INCURRED ON THE COURSE OF THE TRANSFER. THIS TRANSACTION IS HOPE TO LAST WITHIN 21 WORKING DAYS. AS OF DATE OF IT'S COMMENCEMENT.
WE AWAIT YOUR IMMEDIATE TELEFAX:- 234-1-860589 - ON THE PRIVATE LINE, FOR FURTHER INSTRUCTION AND DETAILS. SHOULD THIS TRANSACTION NOT APPEAL TO YOU, DO ME A FAVOR BY GETTING BACK TO ME, FOR SECURITY REASON, SO THAT WE MAY KNOW WHAT TO DO, AS THE PERSONALITIES INVOLVED ARE GOVERNMENT OFFICIALS, WHO HAS PUT MANY YEARS OF ACTIVE SERVICE IN THE OFFICE AND MAY NOT LIKE THEIR REPUTABLE IMAGES DENTED.
URGENT CONTACT AWAITING.
DR. P.S. ADAM
DR. MICHAEL OLISA KUPA
LAGOS - NIGERIA.
ATTENTION: THE PRESIDENT
PERMISSION TO REMIT $33.5 MILLION US DOLLARS (THIRTY-THREE POINT FIVE MILLION US DOLLARS) INTO YOUR ACCOUNT.
I AM AN AIRCRAFT ENGINEER ANID A SENIOR MEMBER OF THE TENDERS COMMITTEE FOR THE PURCHASE OF AIRCRAFT PARTS IN MY MINISTRY, THE FEDERAL MINISTRY OF AVIATION.
AFTER THE CONSULTATION WITH OTHER MEMBERS OF THE COMMITTEE, I AM SPECIFICALLY MANDATED TO ARRANGE WITH YOU FOR A POSSIBLE TRANSFER OF SOME FUNDS BEING AN OVER COST RESULTING FROM VARIOUS CONTRACTS EXECUTED BY SOUTHERN AIRCRAFT MANUFACTURING COMPANY, UNITED AVIATION HANDLERS, INC AND OTHER FOREIGN FIRMS TO THE FEDERAL MINISTRY OF AVIATION IN 1991. THE CONTRACTS IN QUESTION ARE FOLLOWS:
A: SUPPLIES OF AIRCRAFT ENGINES AND PARTS WORTH $1.3 BILLION
B: PURCHASE OF AIRCRAFT AIRCONDITIONERS FOR $710 MILLION
C: SUPPLY OF A REFUELER TRUCK FOR $950 MILLION
D: SUPPLIES OF COMMUNICATION AND NAVIGATION EQUIPMENT WORTH $800 MILLION
E: PURCHASE OF AIRCRAFT EVACUATION EQUIPMENT FOR $1.0 BILLION
F: PURCHASE OF TIRES AND SAFETY/SURVIVAL KITS WORTH $675 MILLION
THE ORIGINAL VALUE OF THESE CONTRACTS WERE PURPOSELY OVER INFLATED BY THE TENDERS COMMITTEE WITH $33.5 MILLION US DOLLARS (THIRTY-THREE POINT FIVE MILLION US DOLLARS) WHICH WE WANT TO TRANSFER INTO YOUR ACCOUNT. ALL THE FIRMS HAVE BEEN PAID ACCORDINGLY.
WE HAVE UNANIMOUSLY AGREED THAT IF YOU/YOUR COMPANY WILL ACT AS THE BENEFICIARY FOR THE FUNDS, THE SHARING WILL BE AS FOLLOWS:
BENEFICIARY WILL RETAIN 30% OF THE TOTAL SUM.
OFFICIALS WILL HAVE 60%.
50% OF THE OFFICIALS SHARE WILL BE EXPANDED ON IMPORTATION OF RESALEABLE AIRCRAFT PARTS INTO NIGERIA. THIS IS BECAUSE AS CIVIL SERVANTS, WE ARE NOT PERMITTED BY LAW TO OPERATE FOREIGN ACCOUNT NOR ALLOWED TO HAVE LARGE SUMS OF MONEY IN OUR LOCAL ACCOUNTS CONSIDERING OUR SALARY BASE.
10% TO OFF-SET INCURRED EXPENSES DURING THE TRANSFER BY BOTH PARTIES.
ALL MODALITIES HAVE BEEN OUR WORKED OUT WITH VERY HIGH RANKING OFFICIALS OF THE CENTRAL BANK OF NIGERIA AND FEDERAL MINISTRY OF FINANCE TO FACILITATE THE REMITTANCE OF THIS SUM INTO YOUR ACCOUNT WITHIN FIVE WORKING DAYS OF RECEIVING THE FOLLOWING DOCUMENTS AND INFORMATIONS FROM YOU.
FOUR(4) COPIES OF YOUR COMPANY'S LETTER HEADED PAPERS AND PROFORMA INVOICE, SIGNED AND STAMPED.
THE ADDRESS, TELEPHONES, FAX AND TELEX NUMBERS OF THE BANK. PLUS ACCOUNT NUMBER.
YOUR PERSONAL TELEPHONE AND FAX NUMBERS.
THE LETTERHEAD PAPERS AND PROFORMA INVOICE WILL BE USED TO DRAFT JOB DESCRIPTIONS AND CONTRACT WORTH. THE SAME DOCUMENTS WILL LATER BE SUBMITTED TO THE FEDERAL MINISTRY OF FINANCE, THE CENTRAL BANK OF NIGERIA AND OTHER DEPARTMENTS FOR APPROVALS OF THE FUNDS.
NOTE THAT WE HAVE PUT IN SO MANY YEARS IN THE CIVIL SERVICE AND WOULD NOT LIKE TO FORFEIT OUR PENSIONS, GRATUITIES AND MOST OF ALL, DENT OUR REPUTABLE IMAGE. SO, HANDLE THIS ARRANGEMENT WITH UTMOST SECRECY AND MATURITY CONSIDERING THE CONFIDENTIALITY REPOSED ON THIS BUSINESS.
FOR SECURITY REASONS, REPLY BY FAX AND TELEPHONE FOR FURTHER DETAILS.
DR. MICHAEL OLISA KUPA
The Royal Canadian Mounted Police (RCMP) and other foreign jurisdictions have been monitoring the activities of a company soliciting funds from investors through participation in a five series "financial educational program" which claims to create wealth through education.
The multi-level marketing scheme, known as Investors International (II), was "conceived" by a Dr. RUDOLF VAN LIN (whose real name is believed to be Rudolf Alexander Victor LINSCHOTEN), the Chairman of Investors International Publishing (IIP).
The scheme involves the purchasing of an array of cassettes, literature and videos on topics including offshore technology, government and tax havens. The program is sold as a 5 part "education series". Its clients pay approximately $1,250 US for what is considered the first series or level. The first two levels consist of video tapes and audio cassettes which provide information that, according to some foreign authorities, is considered nothing more than what could be obtained at a library. IIP's clients that reach level 3 are then invited to attend offshore seminars where they are advised that they will learn about international financial programs that are secret in nature and only available to investors who are able to invest large amounts of monies such as $5 million or $10 million. It is during these seminars that IIP's clients are informed of investment opportunities with Sabre Asset Management Corporation (SAMC).
Levels 4 & 5 involve 10 to 14 day international seminars, which offer "certification as an international financier and membership in the Society of International Financiers." Investigation by authorities has established that IIP and SAMC have held cruise seminars and off shore seminars soliciting investors. In order to be able to purchase the first series, participants must first qualify with a sales quota. The quota is six sales in each series, which must be made under the guidance of an approved director.
A review of this activity by personnel in the RCMP Economic Crime Branch suggests a portion of the promotion is taking place in Canada and has many of the properties of an illegal scheme pursuant to Section 55 of the Competition Act or possibly Section 206(1) of the Criminal Code. The Competition Act regulates multi level marketing plans and specifically restricts involvement in a scheme of pyramid selling. The Criminal Code section makes it unlawful for a person who participates in a scheme involving the recruitment of other persons, to expect more in return from what was initially invested. Information has also been received that LINSCHOTEN is currently establishing the multi-level marketing of IIP within Australia and soliciting investors into SAMC. Investigation has identified investors from Canada into SAMC. The RCMP is aware of numerous promoters and victims involved with Investors International in Canada.
Over the past year, the Royal Canadian Mounted Police (RCMP) have received a number of enquiries with respect to a company soliciting funds on the Internet through participation in a pyramid type scheme offering huge returns on investment.
The scheme, dubbed Pentagono, is operated through an Internet home page provided by an Italian company, Future Strategies Srl (Srl, meaning a limited company registration in Italy). They claim to be registered with the Italian Chamber of Commerce and Industry in Modena. They also claim that Future Strategies Srl is a company completely approved by the Italian authorities, operating worldwide. There are a number of Internet websites that post links to the Pentagono website.
In the scheme, investors have to purchase a membership certificate from "a friend" priced at $60 Cdn. Seven people's names are printed on this certificate - the friend's name is on the bottom. Once the certificate has been purchased, you are asked to send $60 to the person who is shown in the top position. You are also asked to send an additional $60 to Future Strategies Srl, Via Muratori 1, Carpi (Mo) 41012, Italy, to cover administrative costs. Once this has been paid, the buyer will receive three additional certificates with his/her name in 7th position. The buyer must then sell each additional certificate at $60 each. By the time the buyer's name reaches the top of the list, the company claims a total of $131,220 can be earned. Future Strategies says, "the mathematically tested Pentagono system represents the improvement and best synthesis of over 50 years of experience and university studies".
The RCMP Economic Crime Branch has reviewed these reports and believes that this investment solicitation exhibits the characteristics of a common "pyramid" scheme and readers are warned that continued participation in the scheme may result in a charge under Section 206(1)(e) of the Criminal Code of Canada. Italian authorities have advised the RCMP that this scheme does not constitute a criminal offence in Italy, but rather a violation of an administrative procedure. The Italian authorities will not be intervening.
The purpose of this bulletin is to alert the Canadian public to this scheme, still running on the Internet, so as to prevent readers from becoming innocent victims. If you encounter any sort of Internet investment solicitation that encourages you to urgently mail or send funds and you feel compelled to participate, the RCMP urges you to first seek the advice of a local investment advisor or banker. Rely only on real people that you can trust!