Nigerian Letter Scam

A highly sophisticated international fraud scam, operating for almost eight years, has been busted by the RCMP Toronto West Detachment Commercial Crime Section.

The alleged criminal group was operating under a known name as the West African-based Organized Advance Fee Fraud, but quickly became more commonly known as the Nigerian Letter Scam. This scam has been going on in the Toronto area for the past eight years, and the responsible group is part of a larger organized crime group based in Nigeria.

The RCMP has identified 300 victims worldwide - most are from the U.S., but others are from Europe and Asia. Victims have been scammed anywhere from $52,000 U.S. to over $5,000,000 U.S.

The RCMP have been involved in this matter since 1998, when complaints on this matter were received from victims who were counselled to travel to Toronto. No actual Canadians appear to be victimized.

Arrested and charged with conspiracy to commit fraud; fraud against the general public; and laundering the proceeds of crime are

- Wenceslaus UTOMI, age 47, of Country Heights, Richmond Hill, Ontario
- Ainsley Anthony DRAKES, age 34, of Genella Square, Toronto
- Richard BREWSTER, age 33, of Yonge Street, Toronto

The details of how the fraud scenario was perpetuated are contained in two basic phases.

During phase one, intended victims receive a letter, either by mail of fax supposedly from officials of a large Nigerian institution, such as the Nigerian National Petroleum Corporation, or the Central Bank of Nigeria. These letters are sent out in bulk, with victims being picked out from corporate directories, and professional memberships.

The letters request an urgent and confidential business relationship between the perpetrators of the fraud, and the intended victim. The purpose is stated to transfer funds out of Nigeria to financial institutions in the victim's country of residence. The funds are generally represented as over-invoiced contracts typically in the range of $25 million U.S.

The letters are allegedly from Nigerian civil servants who bogusly claim they have a legitimate right to the over-invoiced funds. The letter goes on to explain that Nigerian civil servants are forbidden to own or operate a foreign account, and therefore they need the victim's assistance. The victim is falsely offered 10 to 30 percent of the total contract as payment.

The victim is asked to forward personal financial information, including banking information, as well as copies of the victim's corporate letterhead so that payment can be made through a contract claim in the victim's name.

Then the victim is asked to wire a payment of approximately $10,000 U.S. supposedly for legal fees and administration costs in order to secure the business arrangement. Once the victim has wired the money along with the banking information, Phase 2 of the scam begins.

In phase 2, the same victim receives a telephone call from confederates in the criminal group, who are now posing as merchant bankers employed by the Central Bank of Nigeria. The phoney bankers advise the victim that the total contract funds have cleared Nigeria, and are now in an alleged clearing house or mercantile bank in North America.

The fraudulent clearing house's involved in this case were known as:

- The Olympic Finance Clearing House and the Dow Financial Corporation, both allegedly based out of Toronto,

- The Commercial Mercantile Corporation, allegedly based in Detroit,

- The National Foreign Exchange, allegedly based in New York City,

- The American Fidelity Corporation, allegedly based in Chicago, and

- International Contract Affairs, based out of Nassau, Bahamas

While these financial institutions were suggested to be in these different cities, in fact all the phone numbers were call-forwarded to a "boiler-room" in Greater Toronto ("boiler room" is a jargon term in the fraud fighting business to mean a special office set up with telephones where operators use high pressure tactics to scam victims).

Then the scam continues when the victim is informed that before the victim's promised money can be claimed, there are further outstanding fees that the victim must pay. These additional fees are supposedly for charges such as taxes, duties, or environmental levies, and can range from $50,000 U.S. to hundreds of thousands of dollars.

The perpetrators continue to go after the victim to pay even more fees until the victim is broke. None of the victims in this case received any money from these business arrangements, nor a return of their investments. If all the contracts that this criminal group presented were fulfilled, the criminal group would need in excess of $8 billion U.S.

The perpetrators tend to be knowledgeable in international banking, are well spoken, and are professional in their dialogue and behaviour with victims.

Date of Story: Wednesday, July 25, 2001
Story Posted By: Ron Reinhold
Source: Ron Reinhold

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