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Nigeria To Pass Law Clamping Down On Notorious Scams
Stephen Mbogo
Correspondent
Lawmakers are considering draft legislation aimed at stopping individuals and banks involved in the corruption, the proceeds of which are sometimes used to finance terrorism, drug trafficking and other criminal activities.
Nigeria is regarded as the center of the "advance fee" scam - also known as 419 scams after the relevant section of the Criminal Code of Nigeria - used by criminals to defraud unsuspecting victims.
They sound too good to be true - and always are: Unsolicited offers by email or fax to help out an African businessman, civil servant or relative of a political leader who says he needs to get a large sum of money out of his home country.
Generous incentives are offered, usually in the form of a percentage cut, and the target victim is assured there is no risk involved.
A variation is a "bequest" left to you or your organization in the will of an anonymous well-wisher.
At some point, the victim is asked to pay upfront a fee of some type - an "advance Fee," "transfer tax" or similar. Complications arise, requiring more payments until, police investigators say, the victim either gives up or runs out of money.
By some estimates, the scam has cost unsuspecting people around the world around $5 billion since the 1980s.
Introduction of the law in Nigeria follows growing international pressure on the country, from the Paris-based Financial Action Task Force (FATF) and others, to take tough measures against its nationals involved in financial fraud.
FATF had given the West African country until last month to act before it said it would take unspecified steps of its own.
The U.S. and the European Union (EU) have also jointly given Nigeria up to Dec. 15 to act, and the country is one of 17 blacklisted by the U.N. because of financial crimes.
The Economic and Financial Crimes Bill, sent to parliament by President Olusegun Obasanjo, provides for life imprisonment for anyone convicted of money laundering to facilitate terrorist activities.
Criminals use the infrastructure offered by Nigerian banks, especially in receiving the advance fees from victims. Many banks there are themselves also suspected of money-laundering activities.
The proposed law will target any Nigerian bank that covertly or otherwise aids the fraud.
It requires financial institutions to report to the authorities any transaction involving sums of money larger than $5,000, failing which they will be liable for a penalty of more than $8,000 a day. Banks may also lose their licenses to operate.
According to the CIA, it is also a key transit point for heroin and cocaine intended for European, East Asian, and North American markets. Some of the proceeds from the 419 scams are allegedly used to finance the network of Nigeria drug businesses around the world.
The situation has remained unchecked for years, a factor that has undermined Nigeria's efforts to obtain direct foreign investment as well as debt relief.
Nigeria has previously fought the fraud by asking those targeted by the criminals to notify the nearest Nigerian diplomatic mission immediately, but this strategy has been unsuccessful.
Last month, Nigeria organized an international conference on "Advance Fee and Related Frauds" in New York City. During the event, Obasanjo appealed for technical assistance and advice from the U.S.
He said he regretted the "widespread perception within the international community, especially in the United States, that our government is not doing enough to apprehend the culprits."
Jonathan Rusch, a U.S. Justice Department official in charge of fraud prevention, said the U.S. welcomed the opportunity to cooperate with Nigeria in tackling the crime.
"We have developed tools to investigate and prosecute the crime, including the use of statutes dealing with mail, wire, fax and phone fraud," he said.
The U.S. Secret Service has also established an office in Lagos to facilitate the sharing of information and trailing of particular cases, Rusch said.
U.S. residents who receive 419 emails, letters or faxes have been asked to fax hardcopies to the Secret Service task force handling the scam inquiry, at 202-406-6930 or 202-406-5031.
Senders should also indicate whether they have paid out any money ("financial loss - contact me") or not ("no financial loss - for your database.")
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