Advance Fee Fraud

An advance-fee fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain.Among the variations on this type of scam, are the Nigerian Letter (also called the 419 fraud, Nigerian scam, Nigerian bank scam, or Nigerian money offer the Spanish Prisoner, the Black money scam as well as Russian/Ukrainian scam (also extremely widespread, though far less popular than the former). Both the so-called Russian and Nigerian scams stand for wholly dissimilar organised crime traditions, they therefore tend to use altogether different breeds of approaches.

The 419 scam originated in the early 1980s as the oil-based Nigerian economy declined. Several unemployed university students first used this scam as a means of manipulating business visitors interested in shady deals in the Nigerian oil sector before targeting businessmen in the west, and later the wider population. Scammers in the early-to-mid 1990s targeted companies, sending scam messages via letter,fax, or Telex. The spread of email and easy access to email-harvesting software significantly lowered the cost of sending scam letters by utilizing the Internet. In the 2000s, the 419 scam has spurred imitations from other locations in Africa, Asia and Eastern Europe, and, more recently, from North America, Western Europe (mainly UK), and Australia.

The number "419" refers to the article of the Nigerian Criminal Code (part of Chapter 38: "Obtaining Property by false pretences; Cheating") dealing with fraud. The American Dialect Society has traced the term "419 fraud" back to 1992.

The advance-fee fraud is similar to a much older scam known as the Spanish Prisoner scam in which the trickster would tell the scam victim that a (fictitious) rich prisoner had promised to share (non-existent) treasure with the victim if the latter would send money to bribe the prison guards.

Insa Nolte, a lecturer of University of Birmingham's African Studies Department, stated that "The availability of e-mail helped to transform a local form of fraud into one of Nigeria's most important export industries."

Embassies and other organizations warn visitors to various countries about 419. Countries in West Africa with warnings cited include Nigeria,Ghana,Benin,Côte d'Ivoire (Ivory Coast),Togo,Senegal and Burkina Faso.Countries outside of West Africa with 419 warnings cited include South Africa, Spain, and The Netherlands.

Wire fraud is a legal concept in the United States Code which provides for enhanced penalty of any criminally fraudulent activity if it is determined that the activity involved electronic communications of any kind, at any phase of the event. As in the case of mail fraud, this statute is often used as a basis for a separate federal prosecution of what would otherwise have been only a violation of a state law.

The crime of wire fraud is codified at 18 U.S.C. § 1343, and reads as follows:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
In one important case (United States v. LaMacchia (1994) -- text at eff.org), an MIT student was charged with wire fraud when he could not be charged with criminal copyright infringement (having not personally profited from the online distribution of millions of dollars worth of illegally copied software). The United States District Court, District of Massachusetts, dismissed the charges, noting they were an attempt to find a broad federal crime where the more narrowly defined one had not occurred. Congress promptly amended the copyright law to limit further use of this loophole.

The alleged misrepresentation to support a conviction under 18 U.S.C. § 1343 must be a material misrepresentation. Neder v. United States, 527 U.S. 1, 23 (1999). A misrepresentation that is capable of influencing or has a "natural tendency" of influencing a decision is material. Id. at 13.

Thus, the essential elements of the crime of wire fraud are:

(1) Devise or intend to devise a scheme or artifice to defraud another person based on a material representation; (2) With the intent to defraud; (3) through the use of interstate wire facilities (i.e. telecommunications of any kind).

See 8th Circuit Pattern Criminal Jury Instructions, 242 & 250.

A fourth element will be included where the alleged victim is a financial institution, to enhance sentencing as provided in the statute.

Pump And Dump Scheme

False and/or fraudulent information is disseminated in chat rooms, forums, internet boards and via email (spamming), with the purpose of causing a dramatic price increase in thinly traded stocks or stocks of shell companies (the "pump"). As soon as the price reaches a certain level, criminals immediately sell off their holdings of those stocks (the "dump"), realizing substantial profits before the stock price falls back to its usual low level. Any buyers of the stock who are unaware of the fraud become victims once the price falls. When they realize the fraud, it is too late to sell. They lost a high percentage of their money. Even if the stock value does increase, the stocks may be hard to sell because of lack of interested buyers, leaving the shareholder with the shares for a far longer term than desired.

Fraud In paypal Account

This is new form of fraud where a buyer (a scammer) will target ebay auctions which are "Collection in person" and will have a fake address or storage address with P.O Box (as ebay/paypal now allows un-confirmed address and these transactions are not covered by seller protection.). What they will do is buy item from you and pay with paypal and will collect in person. This person will collect item and will put paypal claim back stating he hasn't received the item. Paypal have user policy IF they don't have tracking number they will grant the money back to the scammer (Paypal does not take video evidence,signature proof or any other proof as valid collection).

It is strongly suggested if you are selling item with "collection in person" do cash transaction by handing the item and collecting cash don't fall into ebay trap by accepting paypal payment for collection in person items else the scammer will part with your money and your item!.

Ticket Fraud Of Internet

This is a fast-growing area of internet fraud perpetrated by dishonest internet marketing and retail sites. A variety of products and services are involved. The customer is tricked by a legitimate-looking site and effective marketing into giving their credit card information and CVV number, or sending cash by other means, in exchange for what they believe to be the goods or services. The goods never arrive, turn out to be fake, or are products worth less than those advertised.

Where a credit card is involved, the perpetrators may also aim to use the customer's credit card information to obtain cash or to make purchases of their own. A common example of this type of fraud are pornographic websites that advertise free access. Upon further inspection, however, a credit card is required "for age verification purposes only". The scammers then use your credit card information to make large charges to the credit card.

In cases involving fake or worthless goods, many are health products, related to health fraud. These products might advertise anything from a quick way to lose weight to a cure for a serious disease, and may:

• promise a lot, claiming they can "do it all"
• claim to be a "scientific breakthrough", featuring fake doctors or scientists making claims for the product, with technical jargon that only experts in the field know is used falsely
• feature a long list of "personal testimonials", with no way to check if they are true or fake.

Once your credit card information is given to these type of scam companies, they usually will charge you no matter what type of cancellation you attempt to go through. This can often be overcome by contacting the credit card company. Credit and consumer protection laws in many countries hold the credit card company liable to refund their customers' money for goods or services purchased with the card but not delivered. The loss is then suffered by the card company, but ultimately passed on to customers in higher interest and fees.

Chinese version

This is a variant of the East European Version, in which criminals recruit people through spam. The criminals present themselves as a growing Chinese company trying to establish a presence in the U.S. or Europe and agree to pay an agent whatever the unsuspecting victim is looking to make, and more. Here is an example of a recruiting email:

Dear Sir/Madam, I am Mr. XXX XXX, managing XXXXXXXXXXX Corp. We are a company who deal on mechanical equipment, hardware and minerals, electrical products, Medical & Chemicals, light industrial products and office equipment, and export into the Canada/America and Europe. We are searching for representatives who can help us establish a medium of getting to our costumers in the Canada/America and Europe as well as making payments through you to us. Please if you are interested in transacting business with us we will be glad. Please contact us for more information. Subject to your satisfaction you will be given the opportunity to negotiate your mode of which we will pay for your services as our representative in Canada/America and Europe. Please if you are interested forward to us your phone number/fax and your full contact addresses. Thanks in advance. Mr. XXX XXX. Managing Director

Version Of East Eurapean

This is a variant of the Nigerian Version, in which criminals recruit people through classified advertising. The criminals present themselves as a growing European company trying to establish a presence in the U.S. and agree to pay whatever the job applicant is looking to make, and more. The fraudsters explain to the unsuspecting victim that they will buy certain goods in the U.S. which need to be re-shipped to a final destination in Europe. When everything is agreed they start shipping goods to the re-shipper's house. The rest is similar to the Nigerian Version. Sometimes, when the criminals send the labels to be applied to the boxes, they also include a fake cheque, as payment for the re-shipper's services. By the time the cheque bounces unpaid, the boxes have been picked up already and all communication between fraudster and re-shipper has stopped. Here's an example recruiting email received via SPAM on Oct 2, 2007:

XXXXX Inc. invite residents of the various countries to cooperation. We found your resume on some Job Website because we are searching for reliable professionals or your information has been passed to us by your friends/relatives. Our clients need to accept goods from the various countries. Therefore we creating a network of regional agents which functions are reception of goods and further transferring goods to our shipping managers. We pay you 40$ per received package. We guarantee worthy payment of your work. This job is for you If you want to earn from $150 to $800 per week and work Only 2-3 hours then! This job requires punctuality, good organizational skills and proficiency with Microsoft windows and office programs to maintain inventory and fill forms if necessary. This job is ideal for: housewives, students, older persons, people with restrictions. No money needed to start. This is a business requiring only limited amount of your time. Requirements: 1. A computer with access to the Internet, e-mail 2. We don't work with persons under 18 3. 1-3 hours free during the week 4. Check your e-mail several times a day (each hour is perfect) 5. Reply to e-mails immediately 6. PayPal account to receive payments (optional, WU is also accepted) 7. Be responsible, hard working and communicable We offer competitive compensation, including commission and expense reimbursement. Please send your resume to xxxxxxxxxxx.com Thank You XXXXXX XXXXXXX Manager XXXXXXX Inc.