Don’t Be Taken by One of the World’s Oldest Scams

Don’t Be Taken by One of the World’s Oldest Scams

By Mark Nestmann • May 9, 2017

My client was frantic. She had to make an urgent international wire transfer. The deadline was approaching, but something didn’t smell right.

Thank goodness the client, who I’ll call Debbie, reached out to me.

A few days earlier, Debbie had received a text message informing her that she had won $500,000.  The message instructed her to send a fax to a phone number in Latvia to claim her prize.

After she sent the fax, she received this message:

Dear Debbie,

This letter is to confirm that we have in our possession a CERTIFIED BANK DRAFT for $500,000 to be sent to you upon receipt of the United Nations Office on Drugs & Crimes (UNODC) anti-terrorist clearance certificate.

Please arrange with our colleague ____ to obtain this certificate so that we may release these funds to you.

Yours truly,

Lord Michael Ellis, Barrister

At this point, Debbie became suspicious.  But since $500,000 is, well, $500,000, she decided to investigate further.

She sent an email to this Lord Michael Ellis requesting instructions. The next day, she received a message instructing her to send $18,750 to cover the cost of the certificate.  If she didn’t send the money within 72 hours, she would forfeit her winnings.

That's when Debbie contacted me. And I told her there’s no such thing as an anti-terrorist clearance certificate. It’s merely a variation of a very old fraud — the advance-fee scam.

In an advance-fee scam, a criminal offers you a sum of money. The catch is that you get it only after you pay a smaller amount to have the funds released. The justifications for the advance fee vary, but they're all fictions invented by criminals.  Once you pay, the criminal — and your money — disappear.

Advance-fee scams have been around a long time. One of the earliest scams dates back to the 16th century, when English gentry received letters containing a money-making proposal. A member of a wealthy family was in prison in Spain. In exchange for covering the cost of getting him out, the prisoner would share some of his family’s money. The letter contained instructions on where to send the payment. But there was no Spanish prisoner and no money to be shared.

Easy come, easy go.

The 1980s breathed new life into these scams. Nigeria became a hotbed for them. One variation informed you that you had received a large inheritance from Nigeria. However, a probate proceeding was necessary to finalize settlement of the estate. Would you kindly send the small sum of $15,000 to this address in Lagos to cover probate costs? Naturally, recipients who sent the money never received their inheritance.

When the internet became more widely used in the 1990s, these scams exploded. Today I receive dozens of messages daily that I’m certain are sent by advance-fee fraudsters. Here’s a small sampling:

  • From Denmark, this message: “HERE IS YOUR SUM OF $2,500,000.00 here in our custody.”

  • From Jeffery B. Wall at the Department of Justice, a message that “unsettled funds” amounting to $10.6 million belong to me and being held on my behalf.

  • From Adebayo, the deputy governor of operations for the Nigerian central bank, an offer to assist me with reclaiming funds about to be stolen by the new Finance Minister.

In each case, of course, to process my claim to the money, I must first make some type of payment.

Not all advance-fee scams are this blatant. Here’s a clever example of a scheme aimed directly at me.

About 10 years ago, I received an e-mail from someone I’ll call Regis who claimed to be a book distributor in Australia. Regis wanted to purchase 1,000 copies of one of my books at a 50% discount for resale. The total value of the order was about $50,000, so the proposal immediately got my attention.

There was only one catch: I had to pay to print the books. That would cost me $10,000. Regis had helpfully found a printer that could do the job! To get started, I merely needed to send the printer $10,000. Once the books were printed, $50,000 would be wired to my US account.

Sounds dubious, right? But this was a skillful scam. Not only did it target me directly, but the letter contained none of the misspellings or grammatical mistakes common in advance-fee scams. Regis also sent me a professional-looking contract and coordinates for a bank account in Australia that I confirmed was for a real printer. He even shared his phone number with me. When I called it, the phone was answered by a woman identifying herself as representing the distributor. She immediately connected me to Regis when I asked for him.

But Regis didn’t know that I already had an Australian printer. My printer quoted me a price of $7,500 to produce the books, $2,500 less than what Regis’s printer had offered.

I told Regis that I would print the books myself. As well, I requested that he pay for half of the printing expense.

Regis told me that his book distribution company had an exclusive arrangement with the printer charging $10,000. The deal was off if I used my printer. But he would be willing to front 50% of the cost – $5,000 – if we used his printer. I merely needed to send $5,000 to the printer to get started. He would send me the $45,000 balance when he picked up the books.

Needless to say, I didn’t proceed.

A twist on advance-fee fraud occurs when a criminal buys something from you using a bogus credit card or check. Then he asks for a partial refund. You send it, only later learning that the entire purchase was bogus.

A private investigator friend of mine was targeted by this scam. What the scam artist didn’t know was that my friend is an expert in check fraud.

One day, my friend received a phone call from Nigeria. The caller wanted to hire him for an investigation. After agreeing on a price, the caller promised to send a cashier’s check to pay for the engagement – as I recall, around $5,000.

When my friend received the check, he found tell-tale signs that it was a fake. So he didn’t deposit it. A few days later, he received an urgent call from his new client. There was a family health emergency. The client needed $4,500 to pay for a family member’s surgery. He asked my friend to wire him $4,500 back – my friend could keep $500 for his trouble.

If my friend had deposited the bogus check, it would have eventually bounced. And the $4,500 would have come out his pocket.

As you can see, advance-fee scams have come a long way since the Spanish prisoner scheme. If you receive an offer that seems too good to be true, or simply raises a red flag, beware. Research the person or company that’s asking you to send money, merchandise, or perform a service. Fraudsters don’t like to provide a lot of detail, so make sure to ask lots of questions. Check references, confirm licensing details, check to see if the company is in good standing in the jurisdiction where it operates, etc.

We have experience in this area, so if you’re a client (or want to become one), just get in touch. We’ll help any way we can. Don’t be the next victim!

Protecting your assets (and yourself) against any threat - from the government, the IRS or a frivolous lawsuit - is something The Nestmann Group has helped more than 15,000 Americans do over the last 30 years.

Feel free to get in touch at service@nestmann.com or call +1 (602) 688-7552 to learn how we can help you.

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About The Author

Since 1990, Mark Nestmann has helped thousands of clients seeking wealth preservation and international tax planning solutions. He is the author of highly acclaimed Lifeboat Strategy and other books & reports dealing with these subjects.

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