The syntax is tortured, the grammar mutilated, but the message - sent by snail mail, telex, fax, or e-mail - is coherent: an African bigwig or his heirs wish to transfer funds amassed in years of graft and venality to a safe bank account in the West. They seek the recipient’s permission to make use of his or her inconspicuous services for a percentage of the loot - usually many millions of dollars. A fee is required to expedite the proceedings, or to pay taxes, or to bribe officials - they plausibly explain. A recent (2005) variant involves payment with expertly forged postal money orders for goods exported to a transit
address.

It is a scam two decades old - and it still works. In September 2002, a bookkeeper for a Berkley, Michigan law firm embezzled $2.1 million and wired it to various bank accounts in South Africa and Taiwan. Other victims were kidnapped for ransom as they traveled abroad to collect their “share.” Some never made it back. Every year, there are 5 such murders as well as 8-10 snatchings of American citizens alone.

The usual ransom demanded is half a million to a million dollars.

The scam is so widespread that the Nigerians saw fit to explicitly ban it in article 419 of their penal code. The Nigerian President, Olusegun Obasanjo castigated the fraudsters for inflicting “incalculable damage to Nigerian businesses” and for “placing the entire country under suspicion.”

“Wired” quotes statistics presented at the International Conference on Advance Fee (419) Frauds in New York on Sept. 17, 2002:

“Roughly 1 percent of the millions of people who receive 419 e-mails and faxes are successfully scammed. Annual losses to the scam in the United States total more than $100 million, and law enforcement officials believe global losses may total over $1.5 billion.”

According to the “IFCC 2001 Internet Fraud Report”, published by the FBI and the National White Collar Crime Center, Nigerian letter fraud cases amount to 15.5 percent of all grievances. The Internet Fraud Complaint Center refers such rip-offs to the US Secret Service. While the median loss in all manner of Internet fraud was $435 - in the Nigerian scam it was a staggering $5575. But only one in ten successful crimes is reported, says the FBI’s report.

The IFCC provides this advisory to potential targets:

Be skeptical of individuals representing themselves as Nigerian or other foreign government officials asking for your help in placing large sums of money in overseas bank accounts.

• Do not believe the promise of large sums of money for your cooperation.

• Do not give out any personal information regarding your savings, checking, credit, or other financial accounts.

• If you are solicited, do not respond and quickly notify the appropriate authorities.

The “419 Coalition” is more succinct and a lot more pessimistic:

1. “NEVER pay anything up front for ANY reason.

2. NEVER extend credit for ANY reason.

3. NEVER do ANYTHING until their check clears.

4. NEVER expect ANY help from the Nigerian Government.

5. NEVER rely on YOUR Government to bail you out.”

The State Department’s Bureau of International Narcotics and Law Enforcement Affairs published a brochure titled “Nigerian Advance Fee Fraud.” It describes the history of this particular type of swindle:

“AFF criminals include university-educated professionals who are the best in the world for nonviolent spectacular crimes. AFF letters first surfaced in the mid-1980s around the time of the collapse of world oil prices, which is Nigeria’s main foreign exchange earner. Some Nigerians turned to crime in order to survive. Fraudulent schemes such as AFF succeeded in Nigeria, because Nigerian criminals took advantage of the fact that Nigerians speak English, the international language of business, and the country’s vast oil wealth and natural gas reserves - ranked 13th in the world - offer lucrative business opportunities that attract many foreign companies and individuals.”

According to London’s Metropolitan Police Company Fraud Department, potential targets in the UK and the USA alone receive c. 1500 solicitations a week. The US Secret Service Financial Crime Division takes in 100 calls a day from Americans approach by the con-men. It now acknowledges that “Nigerian organized crime rings running fraud schemes through the mail and phone lines are now so large, they represent a serious financial threat to the country.”

Sometimes even the stamps affixed to such letters are forged. Nigerian postal workers are known to be in cahoots with the fraudsters. Names and addresses are obtained from “trade journals, business directories, magazine and newspaper advertisements, chambers of commerce, and the Internet.”

Victims are either too intimidated to complain or else reluctant to admit their collusion in money laundering and fraud. Others try in vain to recoup their losses by ploughing more money into the scheme.

Contrary to popular image, the scammers are often violent and involved in other criminal pursuits, such as drug trafficking, According to Nigeria’s Drug Law Enforcement Agency. The blight has spread to other countries. Letters from Sierra Leone, Ghana, Congo, Liberia, Togo, Ivory Coast, Benin, Burkina Faso, South Africa, Taiwan, or even Canada, the United Kingdom, Oman, and Vietnam are not uncommon.

The dodges fall into a few categories.

Over-invoiced contract scams involve the ostensible transfer of amounts obtained through inflated invoices to the bank account of an unrelated foreign firm. Contract fraud or “trade default” is simply a bogus order accompanied by a fraudulent bank draft (or fake postal or other money order) for the products of an export company accompanied by demand for “samples” and various transaction “fees and charges.”

Some of the rackets are plain outlandish. In the “wash-wash” confidence trick people have been known to pay up to $200,000 for a special solution to remove stains from millions in defaced dollar notes. Others “bought” heavily “discounted” crude oil stored in “secret” locations - or real estate in rezoned locales. “Clearing houses” or “venture capital organizations” claiming to act on behalf of the Central Bank of Nigeria launder the proceeds of the scams.

In another twist, charities, academic institutions, nonprofit organizations, and religious groups are asked to pay the inheritances tax on a “donation.” Some “dignitaries” and their relatives may seek to flee the country and ask the victims to advance the bribe money in return for a generous cut of the wealth they have stashed abroad.

“Bankers” may find inactive accounts with millions of dollars - often in lottery winnings - waiting to be transferred to a safe off-shore haven. Bogus jobs with inflated wages are another ostensible way to defraud state-owned companies - as is the sale of the target’s used vehicle to them for an extravagant price. There seems to be no end to criminal ingenuity.

Lately, the correspondence purports to be coming from - often white - disinterested professional third parties. Accountants, lawyers, directors, trustees, security personnel, or bankers pretend to be acting as fiduciaries for the real dignitary in need of help. Less gullible victims are subjected to plain old extortion with verbal intimidation and stalking.

The more heightened public awareness grows with over-exposure and the tighter the net of international cooperation against the scam, the wilder the stories it spawns. Letters have surfaced recently signed by dying refugees, tsunami victims, survivors of the September 11 attacks, and serendipitous US commandos on mission in Afghanistan.

Governments throughout the world have geared up to protect their businessmen. The US Department of Commerce, for instance, publishes the “World Traders data Report”, compiled by US embassy in Nigeria. It “provides the following types of information: types of organizations, year established, principal owners, size, product line, and financial and trade references.”

Unilateral US activity, inefficacious collaboration with the Nigerian government some of whose officials are rumored to be in on the deals, multilateral efforts in the framework of the OECD and the Interpol, education and information campaigns - nothing seems to be working.

The treatment of 419 fraudsters in Nigeria is so lenient that, according to the “Nigeria Tribune”, the United States threatened the country with sanctions if it does not considerably improve its record on financial crime by November 2002. Both the US Treasury’s Financial Crime Enforcement Network (FINCEN) and the OECD’s Financial Action Task Force (FATF) had characterized the country as “one of the worst perpetrators of financial crimes in the world.” The Nigerian central bank promises to get to grips with this debilitating problem.

Nigerian themselves - though often victims of the scams - take the phenomenon in stride. The Nigerian “Daily Champion”, proffered this insightful apologia on behalf of the ruthless and merciless 419 gangs. It is worth quoting at length:

“To eradicate the 419 scourge, leaders at all levels should work assiduously to create employment opportunities and people perception of the leaders as role models. The country’s very high unemployment figure has made nonsense of the so-called democracy dividends. Great majority of Nigerian youthful school leaver’s including University graduates, are without visible means of livelihood… The fact remains that most of these teeming youths cannot just watch our so-called leaders siphon their God-given wealthy. So, they resorted to alternative fraudulent means of livelihood called 419, at least to be seen as have arrived… Some of these 419ers are in the National Assembly and the State Houses of Assembly while some surround the President and governors
across the country.”

Some swindlers seek to glorify their criminal activities with a political and historical context. The Web site of the “419 Coalition” contains letters casting the scam as a form of forced reparation for slavery, akin to the compensation paid by Germany to survivors of the holocaust. The confidence tricksters boast of defrauding the “white civilization” and unmasking the falsity of its claims for superiority. But a few delusional individuals aside, this is nothing but a smokescreen.

Greed outweighs fear and avarice enmeshes people in clearly criminal enterprises. The “victims” of advance fee scams are rarely incognizant of their alleged role. They knowingly and intentionally collude with self-professed criminals to fleece governments and institutions. This is one of the rare crimes where prey and perpetrator may well deserve each other.

Also Read

• The Greatest Savings Crisis in History

• The Typology of Financial Scandals

• The Bursting Asset Bubbles

(Case Studies: The Savings and Loans Crisis, Crash of 1929, British Real Estate)

• The Shadowy World of International Finance

• Hawala, or the Bank that Never Was

• Money Laundering in a Changed World

• The Varieties of Corruption

• Corruption and Transparency

• Straf - Corruption in CEE

• The Criminality of Transition

• The Kleptocracies of the East

• The Enrons of the East

• Bully at Work - Interview with Tim Field

• The Economics of Conspiracy Theories

• The Industrious Spies

• The Business of Torture

• Fimaco Wouldn’t Die - Russia’s Missing Billions

• Treasure Island Revisited - Maritime Piracy

• Organ Trafficking in Eastern Europe

• Slush Funds

   Malignant Self Love - Narcissism Revisited

Popularity: 20% [?]

By Khamati Shilabukha

In the past few years, there have been efforts to re-position Africa in the globalising world to take care of relationships among its states and the rest of the world.

The association of African states was restructured from the Organisation of African Unity, to the African Union. Many would argue that this is merely a change in name and not in the character of the organisation.

Proponents of the “new” outfit argue that it is meant to generate a new awareness of who we are. Many also hold the view that Africans are too divided to evolve into a meaningful regional identity.

This argument stems from the myriad conflict situations in the continent. The conflicts are both intra-national and international, with the former more prevalent.

Intra-national conflicts are often the result of internal (political/economic) power squabbles. Sierra Leone, Liberia, DRC, Rwanda, Madagascar, Central Africa Republic, Algeria, Ivory Coast and Kenya are some examples of countries that have experienced such conflicts. They have all received adequate media coverage. But the other genre of conflict has not received the same kind of coverage, yet it is crucial in the pursuit of a global and modern Africa.

This conflict derives from all forms of discrimination including racism and xenophobia. It is vicious and has gone on for some time. These forms of discrimination are serious, and efforts have been made to put them on the global agenda.

The most appropriate example is the current attacks on foreigners in South Africa. The question that begs answers is, why at this time in Africa? All sectors of a society have an obligation to contribute to the resolution of this conflict. We need to examine the extent to which as leaders, scholars and policy makers, we can intervene in this scourge called xenophobia.

It is argued that xenophobia is a result of poor intercultural communication. Members of one culture do not understand, appreciate and accommodate those from another culture. They lack adequate information to deal with such people with the least stress and threat.

But acquiring such information does not come easy and the poor management of communication often leads to strife. This could be the case in South Africa. One major source of information that allows us a wide world view and a more holistic perception and appreciation of others is the mass media. But the mass media, as inanimate objects, cannot do anything. It is those who use and manipulate them that can make the difference.

Xenophobia is a global problem. Although the phenomenon is ubiquitous in contemporary societies, its targets vary across countries and nations. It is such that even those who have been a subject of hate also develop hatred for others. But how does this hatred come about? Anthropologists and other social scientists posit that a population composed mainly of foreigners is an environment in which xenophobia can easily thrive.

They distinguish three theoretical approaches to the rise and diffusion of hatred. The first relates to socio-economic status of individuals, the second pertains to their cultural identity and the third the general attributes of society.

Source of hatred

The first approach derives from the “power theory” – a paradigm that views the relationship between groups as a function of their competitive positions. This concept suggests that a threat of one particular group to another is a source of hatred. When people feel insecure in the face of threat, they portray resentment and hate. But here, the intensity of hate need not necessarily depend on real competition on the job market but on the perception of threat. This is sufficient ground to induce animosity. Much of this is absent in the South African situation.

The cultural symbolic approach holds that animosity towards the other is not a consequence of economic competition between rival groups. It is a product of early political and value socialisation. The main issue here is the fear of loss of social status and identity.

Thus, cultural differences among people could be responsible for conflicts and hatred. In this approach, it can be explained that people would prefer to be surrounded by their own kind rather than be exposed to “strangers”. Defining a group of people as “un-belonging” to the national “we” deprives them of the right to belong. Much of this is also absent in South Africa.

The third approach, termed phenomenology, attributes xenophobia not to economic strains or cultural divergence but to general attributes of society. When society experiences deep crises, which occur intermittently, anomic tensions encroach upon social postures.

This leads to a crisis of collective identity “so that the calm self-certainty which might enable unproblematic relations with the minorities gets lost”. Under this approach, xenophobia is interpreted as a way of reassuring the national self and its boundaries, as an attempt at making sense of the world in times of crisis. This could be happening to indigenous South Africans.

To start with, the impeding fallout between President Thabo Mbeki and Africa National Congress (ANC) leader Jacob Zuma could be disillusioning to many ordinary citizens of African descent.

Many of them subscribe to ANC with a passion yet they find themselves on the sidelines when major party decisions are being made. At the same time, they have not benefited from the economic prosperity of their country.

Many South Africans still live in squalid conditions and the dream of land reform has turned into a pipe dream. These issues run so deep in their collective psyche that they need reassurance of economic and social survival. But they are directing their anger at the wrong enemy.

Many of the low class Zimbabweans, Malawians, Zambians and nationals of other countries are escaping economic hardship and political violence which South Africa has refused to acknowledge as a problem, especially in Zimbabwe.

They should commit themselves to assisting them to the best of their capacity. And this applies to other countries with a chance to host other Africans in need of refuge and sanctuary.

Popularity: 32% [?]