Gazette - Nigerian advance fee fraud scams

COVER SECTION

By Olaolu Adegbite
Advance Fee Fraud Section
Economic and Financial Crimes Commission of Nigeria

Courtesy the EFCC
Police recovered these low-tech materials used to produce counterfeit identity documents in Nigeria.

Nigerian con men took the world by surprise in the late 1980s with the ingenuity, complexity and sheer scale of their advance fee fraud (AFF) scams. By 1991, a clearer picture emerged of the modus operandi of these sophisticated fraudsters who were taking in hundreds of millions of dollars per year. Their numbers increased at home as did their targets overseas. They reached their victims through regular mail, fax and land phones in every corner of the world.

By 2000, the problem had grown phenomenally, largely from the effective use of information technology. These white- collar criminals became even more bold and brazen due to weak enforcement in Nigeria. They lived in opulence and passed themselves off as benevolent philanthropists. Like the narcotics barons of South America and the mafia dons of Italy in the 1970s, they also became politicians.

The people of Nigeria paid a high price. All citizens were being painted as fraudsters by interests overseas. International business was scared away by Nigeria’s dubious reputation, while direct foreign investment fell drastically. By the end of 2002, the intergovernmental Financial Action Task Force against money laundering listed Nigeria as a non-co-operative country. And Transparency International’s Corruption Perceptions Index ranked the country among most corrupt nations in the world.

Fighting back

Establishing the Economic and Financial Crimes Commission (EFCC) of Nigeria in April 2003 changed the rules.

Vigorous enforcement measures by way of arrest, prosecution, intelligence, prevention, public education, disruption and assets seizure led to a drastic reduction in the prevalence of AFF scams and other economic and financial crimes in Nigeria.

The gains were immediately felt through sharp economic growth, improved national image, better political governance and renewed confidence among foreign investors.

The EFCC had made Nigeria less desirable for fraudsters. Many abandoned their illicit vocation, while a few professionals simply relocated to other less hostile environments where they continue to perpetrate their crimes of greed with less physical risk.

The West African sub-region — especially Ghana, Togo, the Republic of Benin, Burkina Faso, Mali and Ivory Coast — has witnessed a drastic upsurge in AFF-related activities since 2004. The same is true in South Africa, the United Kingdom, Holland, Spain, the United Arab Emirates and Canada. It is futile to pretend that a few Nigerians are not involved in these overseas boiler rooms.

Contrary to suggestions by some theorists, we have not yet established any concrete links between Nigerian AFF networks and other international criminal groups such as Eastern European criminal groups, major narcotics syndicates, human trafficking groups or terrorist elements.

The EFCC has charged over 300 AFF-related cases to various Nigerian High Courts and not a single violent act was used by the suspects in any of the cases.

There is also no conscious effort by the scammers to ally with any specific foreign criminal group.

Their activities are fluid, anonymous and borderless. We have recorded cases where credit card details have been obtained by Nigerian AFF scammers from Vietnamese hackers’ sites as well as others from Romania, Russia and the United States.

We can hazard a guess at the future direction of AFF scams based on past experience, current intelligence and the latest trends:

• There will be a decrease in the number of AFF scammers. However, surviving ones will be more potent and effective.
• The current scam pitches, which appeal strongly to the victim’s sense of greed (scams involving contracts, fund transfers, black money, inheritances, lotteries, precious stones and crude oil) will shift to emotional ones (scams involving pets, charities, religion and romance).
• Operational bases will most likely shift to Europe and North America to give prospective victims a false sense of security (‘Nigeria’ will not feature at any stage of the scam). Also, law enforcement in these jurisdictions focus mostly on violent crimes.
• There will be increasing participation of other nationals in AFF scams,especially citizens of countries that currently host boiler rooms.
• Perpetrators will increasingly take advantage of weak international law enforcement collaboration, legislation gaps in certain jurisdictions, bureaucratic bottlenecks with Mutual Legal Assistance Treaty requests, intelligence gaps, cumbersome extradition procedures, poor information sharing in the law enforcement community, strict disclosure laws and threshold requirements.
• There will be an increase in the usage of very small aperture terminal (VSAT) facilities, voice over Internet protocol (VoIP), and proxy servers by scammers to avoid detection.
• Targeted victims will grow larger in number and geographical spread as broadband Internet becomes more accessible, but the aggregate losses for these new users will be considerably lower than for victims in North America and Europe. The Asian, Middle Eastern and Australian regions will record more victims than North America on account of current preventive measures being taken by the United States and Canada.
• AFF scammers will acquire more knowledge and become moretechnologically sophisticated in carrying out major intrusion attacks to obtain account information on their own, instead of relying on other crackers and hackers.
• Spoofing and phishing attacks will increase with the recent introduction of e-payment systems in Nigeria and as scammers gain more experience.
• E-payment platforms will replace Western Union andMoneyGram as the major mode of receiving AFF proceeds.
• There will be a drastic upsurge in the use of postal and courier services in neighbouring West African countries — especially the Republic of Benin, Ghana and Togo — to export fake financial instruments and receive Internet scam packages.
• Large-scale manufacturing of counterfeit bank cheques, money orders, gift vouchers, travellers’ cheques and other financial instruments used in AFF scams will increase in North America and Europe.
• The motive for AFF crimes will always be the money, and perpetrators will continue to keep their safe distance from violent crimes.

AFF scammers are intelligent and adaptive adversaries who will have little difficulty evolving and developing countermeasures to thwart enforcement initiatives. However, it is our view that a strong synergy between law enforcement agencies and industry — particularly providers of postal, courier, banking, money transfer, telecommunications and Internet services — is essential to designing and implementing strategic control measures to eradicate AFF scams, which are better prevented than detected.