__________________________________________________________________

FINANCIAL INTELLIGENCE CENTRE (FIC)

REPUBLIC OF NAMIBIA
P.O.BOX 2882, Windhoek
Tel: + 264 61 2835100, Fax +264 61 2835259

Web address: www.fic.na

E-mail address: [email protected]

ADVANCE FEE FRAUD SCHEMES

ISSUED: SEPTEMBER 2019

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1. Introduction

In its efforts to enhance the ability of various stakeholders to mitigate Money Laundering
(ML), Terrorism and Proliferation Financing (TF/PF) risks, the Financial Intelligence Centre
(FIC) has a duty to enhance public awareness with regards to known fraudulent schemes
that the public could be exposed to. The increased ability of criminals to operate globally
is a potential danger for social and economic order in every country. The massive potential
profits to be gained from such organised crime encourage criminals, who usually are
already involved in other serious crimes, to extend their activities to organised crimes such
as Money Laundering, Terrorism and Proliferation Financing on a national and
international scale.

Generally, and within this report, the term 'Advance Fee Fraud' is to trick prospective
victims into parting with funds by persuading them that they will receive a substantial
benefit, in return for providing some modest payment in advance1. This fraud is also known
as the '419 scam'. In other words, an ‘Advance Fee Fraud’ is a confidence false pretense
in which victims are persuaded to advance relatively small sums of money in the hope of
realizing a much larger gain. The fraud has been around for decades and usually targets
entities and individuals.

This document aims to forewarn the public by sharing information about the modus
operandi used by perpetrators in such practices. Equally, the forewarning report avails
guidance on how members of the public can protect themselves. It is hoped that can, inter
alia, minimize the occurrence of these scams, which in turn reduces the chances of
laundering proceeds from such activities through the financial system.

As mentioned above, modern scams are on the increase across the globe. Lately, the FIC
has worryingly noted increasing incidents of members of the public becoming targets of
advance fee fraudulent scams. Fraudsters are using advanced and new techniques with
intent to defraud or obtain money from innocent members of the public by false pretense.

1 Smith, Holmes & Kaufmann 1999:1

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2. How do these schemes operate?

The perpetrators use various platforms with the most significant platform emails, direct
telephone calls and other online networks to engage their targets. Such fraud typically
involves fraudsters promising the prospective victims wealth, gifts, prizes or employment
in exchange for a small advance payment. When a victim goes along with the story
(persuaded) and pays the fee, fraudsters may either completely disappear (become
unreachable) or invent a series of difficulties which require further payment from the victim
until the victim is out of money or stops such payments completely. Below are sampled
case studies shared to highlight certain common features of advance fee fraud schemes:

Case study 1: Deceased estate

Dear Ms. Luu,

I am Mrs. Vilo Bali, the wife of late Mr. Nilo Bali, both
Namibian citizens. My husband worked with the Texa
Company in South Africa (SA) for twenty years before he Case study 2: Lottery Winnings
died in the year 2018. When my late husband was alive Dear Mr. Xuli,
he deposited the sum of NAD 6.5 Million in a Financial
Congratulation!!
House in SA. The management informed me a sole
I would like to inform you that your
beneficiary that my account is DORMANT and if I do not
re-activate the account, the funds will be cellphone number was selected from our
database and you have won a large cash
CONFISCATED, or I rather issue a letter of authorization
prize of NAD 1 000 000.00. This is from a
to somebody to receive it on my behalf, since I cannot
total cash prize of USD 5 000 000, shared
come over. I have decided to select you, so that the
money can be transferred to your account electronically among the (25) twenty-five international
winners in this category. However, I would
once you activate the DORMANT ACCOUNT and I need
like to inform you that in order to claim
the following details below to send the LETTER OF
AUTHORIZATION to the financial house in SA that you your prize, we would like you to confirm

are now the sole beneficiary. See below: your personal details and contact number.
You are further required to pay a small
NAME IN FULL:
payment as a release fee for your prize.
CONTACT ADDRESS:
DATE OF BIRTH Kindly reply to this email so we can
arrange your prize as soon as possible.
COUNTRY:
OCCUPATION: Yours Faithfully,

Mr. Yobu
I want the project to be kept very secret and details of
my contact with you should not be disclosed to anybody Halifax Financial House
and this is because my husband’s family might want to
do everything to gain possession of this money for their
own selfish interest.

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 Red flags of these schemes

Fraudsters may claim that political climate, taxes or other regulatory

restrictions prevent them from accessing funds in a foreign bank account
and request your help to gain such access;
Fraudsters may claim that your last name is the same as that of the
deceased person who owned an account and may suggest that you act
as the next of kin of this person in order to gain access to the account’s
funds;
The perpetrators may inform you that you have won some huge prize and
may even produce or send you an illegitimate previous pay-out to other
people globally to buy your confidence. In addition, they may use forged
letterheads of known law firms to enhance your confidence in their
scheme;
They may claim that a wealthy individual, who has a terminal illness,
needs your help to distribute his/her wealth to charity;
The perpetrators may attempt to mitigate the risks involved for the email
recipient. The messages may indicate that the transfer scheme is safe
and will be legally binding, using language like “this transaction is totally
free of risk and troubles,” or “this will be a proper and legal money
transfer and there is no risk. Some messages may begin with a greeting
such as “greetings in the name of our Lord Jesus Christ”;
The victim is promised a dream job, but has to make payments for taxes,
visas, “anti-terrorism certificates” or any other formalities; and
The perpetrators may use critical and serious tone language in the
subject line of the message that may tempt recipients to open the e-mail
such as “Urgent Attention”, “Read and Reply As Soon As Possible”,
“Attention Friend”, “Payment Agent Needed.” “Congratulations” and
“Attention Winner” amongst others.

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 3. How do I protect myself from these Schemes?

Do not trust strangers- Fraudsters often

Be extremely cautious with
pretend to be someone from a trustworthy
offers via email, especially if
profession, such as a policeman, a charity
they are unsolicited and are fundraiser or an employee at your banking
from unknown sources; and institution. In the real world, such people will
Be vigilant of bogus never request you for sensitive information
sites. Cybercriminals can create such as passwords, credit card numbers
websites that mimic popular sites to and others, so if they do, be suspicious.
trick people into revealing their
personal information.

Obtaining personal information

from the prospective victim appears
Do not be tempted to respond to be the key purpose of fraudsters’
positively in the hope of e-mail contact, as they can then
getting more information. You engage in identity theft or drain
may merely be confirming victim bank accounts.
your email address and
making it easier for the
perpetrators to pursue you.
Passwords and pin numbers-It is
good practice to use different
Do not send money through passwords each time you create
wire transfers to someone an account online. Using a single
you do not know; and password means that if a
Never believe the promise fraudster cracks one account,
of large sums of money for they can gain access to others.
your cooperation from Commit pin numbers to memory
someone you do not know. and do not write them down.

Computers are a popular target for

fraudsters. Scammers can create
websites containing malicious Remember that fraudsters may know
code and emails with viruses basic details about you and may fake
attached in an attempt to steal your details. If someone claiming to be
important details. Downloading the from your banking institution contacts
latest anti-virus software and using you out of nowhere, hang up the phone
an up-to-date operating system will and get in touch with them directly using
prevent most of these attacks. a known contact detail.

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It is worth noting that several message categories were created on the basis of the stated
credentials of the sender (scammer) and their reason for contacting the recipient
(prospective victim). Regardless of the method used, victims may not report their
experience to law enforcement agencies. Some victims may be reluctant to report the
incident out of fear they will be prosecuted for their involvement in the illegal act. Victims
may also feel too embarrassed to report that they have lost their money by simply
responding to an e-mail message. As a result, it is unknown how many individuals actually
receive, respond to, and defrauded through advance fee e-mail scams.2

REMEMBER

Scammers generate funds by applying pressure tactics that forces unsuspecting persons
into making hasty decisions influenced by great promises. If you become a victim of an
advance fee fraud scheme, immediately file a report with the FIC at Bank of Namibia or
contact the nearest police station to initiate a criminal investigation. This can enable
intervention that reduces risks of future illicit activities. Minimizing the occurrence of these
schemes reduces the chances of laundering proceeds from such activities in the financial
system.

2
Buchanan and Grant, 2001