Rory Chadwick just wanted to sell his portable DVD player on a local Internet classified board. But what he got was an education on a Nigerian-based scam that bilks Americans citizens out of hundreds of millions of dollars every year.
A few weeks ago, Chadwick, of Hoboken, placed an ad on the Internet board hobokeni.com to sell an old DVD player he no longer needed. Several days later he received an e-mail from “Jude Anderson” who said he was from South Africa and was interested in buying the used merchandise for $250.
Chadwick was immediately suspicious of why someone half a world away would want to buy a DVD player from Hoboken. But the mysterious e-mailer tried to allay Chadwick’s fears by saying that in South Africa such pieces of equipment are rare and in high demand.
Chadwick still wasn’t buying it.
“I knew something wasn’t right from the beginning and that I was never going to feel comfortable doing business with this person,” he said. “But at the same time, I was intrigued, so I played along to see where things would take me.”
Shortly, Chadwick received a FedEx package from “James Wood” from Lagos, Nigeria that appeared to have cost $55 to send. Inside was a supposed $3,000 money order allegedly from a Chicago area bank. At this time, Chadwick received another e-mail from Anderson that weaved a tall tale about his friend, James Wood.
Anderson said that Wood was a friend who had owed Anderson money and paid it back with a money order for $3,000. Anderson claimed he could not cash the money order in his native land. He asked if Chadwick could deposit the money order into his personal account, deduct the cost of the DVD player and 10 percent of the amount for his troubles, and then send the merchandise and the remainder of the $3,000 back to Africa.
While the money order was a strikingly accurate forgery and the FedEx packaging seemed legitimate, Chadwick knew at this point that he was being scammed. It didn’t help the scammers’ case that the package was sent from James Wood and the check was in the name of “Paul Wood,” which was most likely a careless mistake made by the scammers.
He dialed the phone number for the Chicago area bank on the check and a teller at an actual trust company in Chicago picked up the phone, but quickly informed him that this was a confidence con and that he should not deposit the check or send any money.
Chadwick said that while he didn’t fall victim, he understands how people could.
“There are trusting people out there might go along with something like this,” he said. “The fact that the money order looks real and someone spent $55 on a FedEx delivery might be enough to persuade someone to send cash.”
After he realized that he was the target of the scam, he went to the police, filed a report, and approached the press to tell his story.
“This is something that is happening right here in Hoboken,” he said. “It’s something that people should be aware of so they aren’t conned.”
He added that this scam was particularly innovative because not only would he have been scammed out of his cash, but also out of a high-tech device that the crooks could use themselves or resell.
A big crooked business
Chadwick is justified in showing concern for his fellow American citizens. Since 1995, the United States Secret Service, under a mandate to protect U.S. currency and financial institutions, has been working with the Department of Commerce and Nigerian and other foreign authorities to reel in the corrupt operations, which run the spectrum from crude spam e-mails to elaborate schemes, such as the one Chadwick encountered.
“Advance Fee Fraud” or “4-1-9” scams, after a old Nigerian criminal code for theft under false pretenses, have been around for at least a decade, according to Secret Service officials. “In response to this growing epidemic, the Secret Service established ‘Operation 4-1-9’ to target Nigerian Advance Fee Fraud on an international basis,” reads a recent Secret Service release. “Indications are that losses attributed to Advance Fee Fraud are in the hundreds of millions of dollars annually.”
According to Les Henderson, the author of Crimes of Persuasion: Schemes, Scams, and Fraud, new variations of the scheme are being developed all the time, but the most common forms range from the sale of crude oil or other commodities at below-market prices and the transferring of funds from “over-invoiced” or “over-estimated” Nigerian contracts to laying down a deposit to reap a portion of a large unclaimed estate in the future.
He added that some of the phrases one might come across are, “My father left me $40 million in his will but I have to bribe government officials to get it out,” or “The Nigerian National Petroleum Company has discovered oil and as government employees we want to acquire the land, but we need a front man to purchase it for us,” or “We just sold a bunch of crude oil in Nigeria, but we have to bribe the banker to get it out.”
“They essentially need your distant involvement in some illegal, but mostly white-collar criminal proposal,” said Henderson. “They will want to get the money out of Nigeria or other West African country by using you as a conduit ‘who will benefit greatly from your assistance and cooperation.’ ”
He added that the crooks want their prey to believe that the venture has an air of secrecy and mystery.
“The goal of the criminal is to delude you into thinking that you are being drawn into a very lucrative, albeit questionable, arrangement,” said Henderson. “You must first be reassured and confident of the potential success of the deal without risk to yourself.”
Henderson also said beware of scams that express an extreme sense of urgency. “There is always a sense of urgency attached to the proposal,” he said “A government audit in the near future will close the window of opportunity or the job of the person able to transfer the funds is in jeopardy.”
Why Nigeria?
Many of the scams in the last few years have come out of Nigeria. Henderson explained why.
For one reason, he said, Nigeria is a former British Colony, so most of the population speaks English. But Henderson added that much of it has to do with the country’s past.
“I suppose it has to do with the history and customs of the country itself,” said Henderson. “Just as Mexico is known for bribery and fixes, any impoverished country has the potential for graft. This means an industry can be established and protected from legal interference.”
He added, “They have a lot of educated English-speaking good-natured men who find themselves without employment opportunities but an entrepreneurial desire to succeed.”
But he concluded that, to be fair, the Nigerians in no way have the market cornered on such scams.
“America is rife with the same concept, but they just use different advance fee fraud techniques such as fake credit card offers, cramming and boiler room investments,” he said. “The Nigerians just found a formula that works and has remained identifiable to the country. American scammers just change the company names more often, obscuring the repetitive, continuous nature of their ongoing and equally destructive operations.”
He also said both the American and Nigerian government are ineffective at stopping the scammers, but the Nigerians have so little in terms of resources that it is likely that the scams will never go away.
If you believe that you are a victim of such a scam, contact the United States Secret Service Financial Crimes Division in Washington, DC at (202) 406-5850. If you receive a suspicious letter in the mail you can forward it to Inspection Service Operations Support Group, Two Gateway Center, ninth floor, Newark, N.J. 07175.