Business

The Nigeria scam

A money-raising fraud finds victims in Canada

KIMBERLEY NOBLE March 16 1998
Business

The Nigeria scam

A money-raising fraud finds victims in Canada

KIMBERLEY NOBLE March 16 1998

The Nigeria scam

A money-raising fraud finds victims in Canada

The letter, signed by a Dr. Sam Okolie, was from the Nigerian National Petroleum Corp. Okolie explained that he had recently come into control of $41.5-million (U.S.), the result of what, in a widespread Nigerian moneyraising scam, is invariably described euphemistically as the “over-invoicing” of a long-forgotten contract. Bribe money, by implication. All Okolie needed, he went on, was a Western businessperson to pay the occasional export or insurance-type fee to help

move the money safely into foreign bank accounts. It would involve absolutely no risk to the partner, who would nonetheless get 30 per cent of the money in exchange for his or her aid. Each year, thousands of small-business people and professionals in Canada receive similar letters. Most just laugh and throw them away. But, as outrageous as the proposition seems, someone always falls for it. Nigerian “advanced-fee” frauds, like the battery-driven pink bunny, just keep going and going. No matter how many warnings Canadian police issue, or how many times the Central Bank of Nigeria buys full-page advertisements in Canadian newspapers vowing that no self-respecting

Nigerian has anything to do with these illegal ventures, or how many victims appear on television to relate their sad stories, there is always a fresh supply of willing would-be money-launderers. Only they never see a penny of the fictional cash. “About every two weeks,” says Staff Sgt. Fred Pratt of the RCMP’s economic crime unit in Ottawa, “we receive information that someone in Canada has lost money.” The amounts tend to range between $60,000 and $800,000. And they appear to be getting bigger as the Nigerians, who have been honing their pitch for more than a decade, manage to rope even seasoned business executives into their international scam.

Take the Sam Okolie gambit. In early January, a St. John’s, Nfld., lawyer arrived at the province’s RCMP commercial crime office with a briefcase full of documents and a

story about how he and a handful of clients had responded to Okolie’s request. The lawyer spent an estimated $1.25 million travelling to Ghana, Latvia and the Ivory Coast, covering a stream of expenses arising from the effort to get the contraband cash safely out of Nigeria.

After a few months of international intrigue, the lawyer and his partners fell for another wrinkle: they put up $165,000 (U.S.) (the Nigerians usually want U.S. or British currency) to purchase a bottle of cleaning

solution that the fraudsters claimed would be used to remove dye from U.S. cash marked for destruction. Police say the lawyer met the conspirators in Accra, Ghana, where he saw a suitcase of money and had a demonstration of how the dye works. “It’s basically sleight of hand,” says Pratt. “But you think, oh gosh, this is a great deal. Until you find out that you are always paying, but there’s no money.” Investigators say that, since the mid1980s when plummeting oil prices forced even university-educated white-collar workers in the west African nation to scramble to survive, some Nigerians have perfected the scam. They became master forgers, starting with stamps and letterhead and, according to investigators, plowing the proceeds into what is now an enormous infrastructure. Some claim to run a network of ships that purportedly carry crude oil around the globe. Others are expanding into drugs. But the core illegal Nigerian business remains the advancedfee fraud, a mail-based enterprise that an Internet Web site, dedicated to fighting this particular crime, claims has grossed $7 billion since 1989.

MIKE PINDER FOR MACLEAN'S

Of that amount, roughly $200 million to $300 million is thought to have come from Canadians. That number is based on the RCMP’s assumption that the $50 million so far reported to police represents only a fraction of the actual losses. “People don’t want to come forward because they are either embarrassed or afraid they are a party to some offence,” says Sgt. Leigh DesRoches of the St. John’s RCMP commercial crime unit. “We guess that we find out about, at most, 20 per cent of what really happens.”

That could be changing. The RCMP in St. John’s is investigating two incidents besides the lawyer’s, involving losses of $20,000 and

$30,000. And in February, a Mississauga, Ont., man approached the Peel Regional Police to report being bilked of $10,000 in a Nigerian fraud. Several other cases are under investigation in Ontario, including two in Kenora, where a local credit-union manager is charged with defrauding his employer of more than $1 million, which he used to pay fees to Nigerians. The Kenora police, however, have been unable to persuade the other local victim that he has actually lost his money, which so far totals about $100,000. ‘These Nigerians are so talented,” says Const. Chris Ratchford. “You wouldn’t believe what it’s like when they get their hooks into people.” S The only encouraging story ^ involves a Toronto-area doctor who had paid out $60,000 and was about to liquidate another

$56,000 in RRSPs when his wife insisted he call the police. The doctor subsequently ended up at the centre of a six-month sting operation that culminated last month in the arrest of a businessman as he was leaving the Holiday Inn in Amsterdam. If the Mounties succeed in their effort to extradite him, that could lead to the first Nigerian fraud trial in Canada. If not, they are optimistic it will at least scare some scamsters away. ‘We hope this will send a signal that if they target Canadians, they could get caught,” says Sgt. Craig Hannaford of the RCMP’s commercial crime section in Newmarket, Ont. And if that fails, the police are back where they started: doing their best to persuade Canadians that they would be better off throwing away any letters promising a windfall from a dubious venture in Nigeria.

KIMBERLEY NOBLE