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You’ve Got Fraud!

Mobolaji Aluko, a Nigerian who chairs the department of chemical engineering at Howard University in Washington, D.C., has a devil of a time convincing Americans to invest in his entrepreneurial business ventures back home. Nigeria’s political and social instability don’t help. But equally important, says Aluko, are the endless e-mail scams originating from Nigeria that ...

Mobolaji Aluko, a Nigerian who chairs the department of chemical engineering at Howard University in Washington, D.C., has a devil of a time convincing Americans to invest in his entrepreneurial business ventures back home. Nigeria’s political and social instability don’t help. But equally important, says Aluko, are the endless e-mail scams originating from Nigeria that are "always at the back of [investors’] minds."

Termed "advance fee fraud," or "419s" after a section in the Nigerian penal code, these e-mail cons rake in hundreds of millions of dollars globally per year, according to estimates by the U.S. Secret Service (www.ustreas.gov/usss/). The scam is indigenous to Nigeria, where it originated in letter form in the 1970s, and has experienced little export. Generally, recipients are asked to facilitate large wire transfers via their bank account in return for a cut of the action. But first, victims fork over advance fees to cover processing or customs costs. If the victim stays on the hook, more fees pop up. Globally, the problem is difficult to quantify precisely, mainly due to victims’ embarrassment. The impact is probably severe, as some figures show. Britain’s National Criminal Intelligence Service (www.ncis.co.uk) says Britons lost roughly $13.5 million last year alone, with the average individual loss coming in around $91,000.

Seventeen people have been killed since 1992 in Nigeria trying to recover their lost funds. Nigeria’s government has been lax in responding to advance fee fraud, in part because the scams help finance Nigeria’s fledgling Internet sector. In a recent press release, the Central Bank of Nigeria said simply, "you have been warned," and then blasted the "so-called victims" who seek legal retribution against the bank. But a handful of Web sites are helping combat the problem. Iceland-based International Investigation Services (IIS) operates a fee-for-access site (www.superhighway.is/iis/) that includes an index of known scammers. As of mid-March, IIS had catalogued 2,784 suspected criminals. A Bangkok, Thailand-based Web site (www.2bangkok.com/2bangkok/Scams/Nigerian.shtml) run by unknown entrepreneurs includes photos of fraudulent Nigerian government documents and sells Nigerian scam-letter T-shirts for the bargain price of $15.99.

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