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Inside The Letter-Scam Industry

By Bolaji Ojo

In October 1994 Malaysian entrepreneur Sarajul Hoda Abdul Hassan wrote to the Nigerian Chamber of Commerce Industry Mines and Agriculture (NCCIMA) for information on potential partners for his business, Mosara Holding Sdn. Bhd., an international trading company. Hassan's hope was to avoid dubious businessmen by going through the West African nation's leading private-sector organization. It didn't quite work out that way. "I didn't get any reply from NCCIMA but I have since received 10 letters asking for the use of my account in transferring huge amounts of money, $78 million in one instance, out of Nigeria," says Hassan. "I believe the writers got my name from NCCIMA."

It shouldn't surprise readers that Nigeria's notorious trade fraud, the letter scam, is still around and claiming gullible victims, including Asian executives. Since January 1994, when  ASIA, INC. ran its first report on the topic, many more people have fallen for the scam, and hundreds of others have reported attempts to dupe them.

The scam is usually introduced by a letter stating that the writer has access to huge sums of government money ranging from $25 million to $80 million. All he needs to transfer the money out of Nigeria, he says, is a foreign bank account. Letter recipients are promised 25 percent to 35 percent of the sum for the use of their account, but takers invariably end up losing thousands of dollars in advance payment to the con men. "I have received a stack of similar proposals over the past years," says Kyoto-based businessman and  ASIA, INC. reader Saren Bisgaard.

Hassan and Bisgaard were smart enough to escape the dragnet of these fraud artists. Others spread across Asia, North America, Europe and South Africa have not been as fortunate. In the past year alone the scam has stung dozens of Asians, including at least 10 Indonesians. One Jakarta-based exporter lost $1 million.

To find out who is behind this flood of illicit mail fraud,  ASIA, INC. correspondent Bolaji Ojo followed the con artists back to their lair in Ikeja, a wealthy suburb of Nigeria's capital, Lagos, and discovered that the scam is a lucrative industry, providing jobs for hundreds of operators throughout southern Nigeria. Despite official claims to the contrary, the problem is growing, and Nigerian government officials don't seem to be doing much to stop the flow of illegal letters to unsuspecting executives:

Nigro Ben Ventures Ltd., a small two-man shop offering fax, photocopy and typing services on a side street in the heart of Ikeja, appears at first glance to offer secretarial services to the general public. Inside, however, the reception is chilly and decidedly hostile to strangers. Last May, an ASIA, INC. request to copy some documents was met with a firm no. "The machine we have cannot do the job," said the shop attendant. At that time, a letter prepared on the premises was clearly visible, typed on the photocopied letterhead of the Presidential Task Force on the Recovery of Foreign Debts, a non-existent body.

Like dozens of other small companies in Ikeja, Nigro Ben's main business is providing discreet services to a select, trusted group of letter-fraud artists. The neighborhood's transformation from a sleepy residential district into a major swindle center started only a few years ago and mirrors the growth of the industry. Today, well-dressed young men perch on the balconies of buildings. They talk freely with people across the street but firmly block all unknown persons trying to enter any of the law firms and investment companies whose sign plates adorn the walls of the houses. On a typical afternoon, a parade of Lexus, Mercedes-Benz, Infiniti and Honda automobiles cruises the streets.

Scenes like the above can be replicated all over Lagos, but it is in Ikeja and around the Murtala Mohammed International Airport that the business of the letter scam is concentrated. Allen Avenue, which Lagosians consider the headquarters of the city's thriving illegal drug trade, is the most expensive neighborhood in Lagos and is home to many banks, finance houses, car dealerships and fancy shops selling specialized products beyond the reach of most Nigerians. Many of these outfits, according to a police officer with the Lagos branch of Interpol, are the fallout of either drug or letter-scam money.

Another home for the crooks is Ajao Estate, a middle-class neighborhood adjoining the airport. Many of the fraud letters originate there and, in the past, many victims unwise enough to be lured to Nigeria were lodged there in places like the second-rate Panama Hotel. One of the two main entrances into the estate is Lateef Salami Street. Along a stretch of just 20 meters there are four business centers, all equipped with the basic instruments of the trade: a phone line or two, a fax machine, a used photocopier and an electric typewriter. These serve to produce and transmit the letters. Many of the con artists are registered with the business centers and pay about $40 a year to receive fax and telephone calls. Police man a checkpoint nearby, but their attention is on the public bus drivers from whom they collect a regular "protection" fee.

Although most scam operators use business centers, the more successful ones use legal firms and investment companies as fronts for their lucrative activities. Fred Ajudua's FCA Group of companies is a prime example. Inside a white and gold building with a satellite dish on the roof, Ajudua runs 12 companies with interests in finance, law, manufacturing, real estate and retail, all acquired in the past five years. Police say the 34-year-old lawyer's empire is built on more than hard work; Ajudua is currently facing 19 letter-scam-related charges (see No Punishment For The Well Connected).

The rewards of successful scamming are so many and the disincentives so few that its proliferation is hardly surprising. Nigerian law-enforcement agents have not helped matters. Since the situation began to gain international prominence four years ago, not a single person has been convicted of mail fraud. Police claim two people have been sentenced, one in 1994 and another in 1995, but when pressed they cannot give the names of the two supposed convicts.

Scam artists are no longer the half-literate young men who until recently dispatched a flood of poorly worded letters to would-be victims. Today's operators include university-educated young professionals desperate to live in affluence. "They are so powerful they can take over the government," claims a policeman involved in the investigation of the scam. While that is clearly an exaggeration, the fraudsters certainly have very strong connections within the military, the police and the judiciary.

Successful scam artists invest their loot in legal front businesses such as car dealerships, supermarkets, real estate and finance institutions -- 301 finance companies were formally issued licenses by the Central Bank of Nigeria in 1993 alone. A policeman with the Lagos office of Interpol sketches the following profile of the fraudsters: "They spend money mainly on consumables and women, live fast lives, drive flashy cars equipped with car phones and invest in property. A letter-scam man may invest as much as [$125,000, a fortune in Nigeria] in a house and will usually establish business centers. They have a large number of dependents and workers whose duties you cannot fathom. They receive a disproportionately high number of visitors and obtain the highest number of traditional titles."

Some nine years after the scam first came to the attention of Nigeria's law enforcement authorities, the world remains in the dark as to what the government is doing to eradicate the crime. Many diplomats in Lagos are convinced that Nigeria pays lip service rather than seriously fights the scourge. Gerald Ohlsen, Canada's acting High Commissioner in Nigeria, has been in the vanguard of those demanding that the Nigerian government match words with action on the fraud. It is not difficult to see why. Ohlsen estimates that Canadians' losses to the crooks amount to millions of dollars every year.

Unfortunately for victims, Nigeria's efforts to fight the letter scam have been thoroughly inadequate. Among foreign observers, the overwhelming conviction is that the government is as corrupt as the crooks it claims to be stalking. Nigeria's bespectacled military leader, Sanni Abacha, rules Africa's most populous country with uncompromising firmness -- except when it comes to curbing Nigerians' involvement in international trade fraud and drug trafficking. Nigeria's dismal record led the U.S. to impose limited sanctions on the country in early 1995. "For Abacha to say he is fighting crime and corruption in Nigeria is laughable," said author Wole Soyinka, a Nigerian Nobel laureate in exile in the U.S., during a recent interview with the U.S. television program 60 Minutes.

Some Nigerian diplomats also contend that top government officials must be involved in the scam. "The government has to tell us what they're doing with all the documents we send to them because we've not received any replies to almost 99 percent of them," says a Nigerian diplomat in an African country, who says he has forwarded hundreds of scam letters and complaints to officials back in Lagos. "Maybe the problem is with the arm of government that is supposed to implement the laws, because all that needs to be done in terms of legislation and focus on the problem has been done." Canada's Ohlsen agrees: "Effective enforcement of existing legislation will contribute very substantially to the reduction of the problem."

Abacha and his ruling clique probably think otherwise. Amused and disbelieving observers woke up last April 1, traditionally celebrated as April Fool's Day, to learn that Abacha had just signed a new law called the Advance Fee Fraud and Other Related Offenses Decree of 1995. (Advance Fee Fraud is the local name for the letter scam.) But for several months after Abacha's law was announced, copies of the legislation were not available to lawyers, the public or even the Special Fraud Unit, the elite police corps charged with combating the crime. "It is clearly an April Fool's decree," says a local journalist.

Everything about the scam certainly creates the impression of someone monkeying with another person: The con men dupe foreigners; the Nigerian government announces lame regulations against the fraud; overburdened or corrupt policemen conduct perfunctory investigations. One Interpol officer based in Lagos unashamedly admits to ASIA, INC. that police connivance with the scam operators is common. "The issue involved is money, big money, and that's what we're all after," he says. Adds another officer: "Generally, the people involved in the fraud are always strongly connected with top government officials and security personnel. To fight it well the government must sanitize the Nigerian police, the judiciary and other agencies involved."

Many foreign businessmen also believe that elements in the government are involved in the crime. "I suspect some degree of government involvement or at least condonation," says Bisgaard, the Kyoto-based businessman. A Lagos-based Asian diplomat is more careful in his choice of words, but no less skeptical of the Nigerian government's commitment to fighting the scam. "The government says it is doing its best but we are waiting for the result."

It is likely to be an extended wait, the type facing Indonesian businessmen like James Tabrani (who lost $100,000) and Sastra Purnama ($19,500), and Nelson Allen, a Canadian businessman who lost $285,000. Allen holds the distinction of being the only victim who has visited Lagos to give evidence in court against the man who duped him. When contacted recently by telephone, Allen was reluctant to speak, perhaps still hopeful that he may get his money back. The Canadian was adamant, however, about his intention never to visit Nigeria again. It is doubtful in any event that Allen will recover his money or even see the trickster who robbed him convicted.

There are indications that the international community is no longer prepared to accept Nigeria's inaction. In April, five prominent members of the foreign diplomatic corps in Nigeria met with Adamu Mohammed, Abacha's special adviser on economic fraud, and told him they were tired of listening to excuses from the government. Their message was repeated by the U.S. government when Mohammed visited Washington to ask the Americans to lift the limited sanctions they imposed on Nigeria. "By some accounts, he was laughed out of town," reported The Washington Post, quoting a State Department official. "We know their pitch. Our question is, 'What have you done?' They haven't shown us anything."

That question could also be asked of the Central Bank of Nigeria (CBN), an institution that features with stunning regularity in many of the scams. Lately, the CBN has been running newspaper advertisements in Asia proclaiming the innocence of its officials and warning foreigners to beware of bogus offers purportedly involving the bank. The bank says it is "worried by the reckless abandon with which names of some top officials are often fraudulently used by the fraudsters to lend credibility and respectability to the spurious transactions."

The CBN is unwilling to acknowledge high-level official complicity in any crime. However, in March 1993, the Task Force on Trade Malpractice, set up by Nigeria's previous administration, identified the CBN as one of the government departments most deeply infiltrated by the con men. Said the Task Force in a newspaper ad: "They [fraudsters] operate with the connivance of some insiders in these public and private establishments."

A few foreign organizations, such as the Japanese External Trade Organization (JETRO), are taking steps to plug the drain at their own end. Obtaining business information, even such innocuous data as the names and addresses of potential contacts in Japan, from JETRO's office in Nigeria has become a jaw-clenching affair. Few inquirers can even get past the guards without brandishing a sheaf of documents including letters of introduction from reputable organizations. "The procedure is to limit our activities to serious-minded Nigerians and to reduce fraudulent activities," says JETRO in a pamphlet handed to first-time visitors.

Meanwhile, a publication of unknown authorship circulating in Lagos proclaims the con men as heroes. The fraud, says the publication, is the West's just reward for its years of slave-trading and colonization in Africa. "These Nigerians [fraudsters] are going for a pound of flesh from the same people who colluded with our forebears to subject us to economic hardships through money laundering and shady deals," says one article. Were one to buy this argument for even an insane moment, then a logical follow-up question becomes relevant: How did the dozens of unsuspecting Asian victims collude with anyone to colonize Africa?

One thing is certain: No let-up from the con men is in sight for Asia's executives. Why? The Nigerian authorities do not consider Asians to be high-risk victims. In a recent report on countries that the con men target, Nigerian law-enforcement authorities recorded a mere seven scam letters sent to East Asia. Yet the Nigerian Commission in Hong Kong said it received 1,200 complaints in 1991 alone.

Meanwhile, Nigeria's image continues to suffer as its government dithers. Hassan, the Malaysian businessman, still plans to expand his company into Nigeria from South Africa, Zambia and Zimbabwe. But he is wary. "It is difficult to do business in a country like this," he says.

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