A major development affecting business travelers to Nigeria is commercial fraud or scams. The Department of State has prepared this publication for you, the U.S. business traveler. It will help you to identify business scams, provide you with information about what the U.S. Government can or cannot do to assist you, and how you can protect yourself.

Department of State Publication 10786
Bureau of Consular Affairs
February 2001

Protecting Yourself from
Business Scams

Identifying Business Opportunities

Nigeria is an oil-rich West African nation of over 88 million inhabitants. It offers the experienced and determined U.S. businessperson a potentially rewarding business opportunity. As in any market, results are usually obtained through solid research and hard work. The business opportunity that arrives on a silver platter carried by a stranger should be rigorously evaluated by an objective and disinterested party.

The U.S. Government, through district offices of the Department of Commerce and the Foreign Commercial Service (FCS) at the U.S. Embassy in Abuja or the Consulate General in Lagos, Nigeria, can provide some useful initial information. For example, if you have received a proposal for a business transaction from Nigeria that seems too good to be true, it may be a scam. You can fax FCS a request for verification of the bona fides of your correspondent. Your fax should include copies of any correspondence you have received from your Nigerian counterpart.

Recognizing a Business Scam

Each week, the U.S. Embassy in Abuja or the Consulate General in Lagos, Nigeria (along with many other embassies) handles several "scam" cases in which businesspeople, many of them experienced in overseas transactions, have lost to confidence operators sums ranging from a few thousand to upwards of one million dollars.

Frequently, persons who have come to Nigeria to "finalize" such deals have been threatened or assaulted; in a few cases, scam victims have been killed. Unfortunately, local police and other officials have not provided assistance to those caught up in scams. (Although Nigerian immigration officials recently began warning likely victims upon arrival at Lagos airport, the U.S. Embassy's ability to help those already in the hands of their "business associates" is extremely limited.)

Caution, therefore, should be exercised when contemplating any business deal in Nigeria. Scams range from attempts to engage American businesspeople in fictitious money-transfer schemes to fraudulent solicitations to supply goods in fulfillment of nonexistent Nigerian government contracts. Many scam operators are very sophisticated and may take victims to staged meetings, often held in borrowed offices at Nigerian government ministries. They do their research and can often provide plausible, but nonexistent, orders, written on seemingly genuine Ministerial stationery, replete with official stamps and seals.

Simply stated, Nigerian business scams are not always easy to recognize, and any unsolicited business proposal should be carefully scrutinized. There are, nevertheless, some indicators that are warnings of a probable scam. Look out for:

• Any offer of a substantial percentage of a large sum of money to be transferred into your account, in return for your "discretion" or "confidentiality";
• Any deal that seems too good to be true;
• Requests for signed and stamped, blank letterhead or invoices, or for bank account information;
• Requests for urgent air shipment, accompanied by an instrument of payment whose genuineness cannot immediately be established;
• Solicitation letters claiming the soliciting party has personal ties to high Nigerian officials;
• Requests for payment in U.S. dollars, in advance, of transfer taxes or incorporation fees;
• Statements that your name was provided to the soliciting party either by someone you do not know or by "a reliable contact;"
• Promises of advance payment for services to be provided to the Nigerian government;
• Claims that a Nigerian visa is not necessary or that arrival in Nigeria should be overland from a neighboring country;
• Resistance by Nigerian partners to your checking in with the U.S. Embassy;
• Any offer to supply crude oil; and
• Any offer of a charitable donation.

The indicators listed above are some of the most common and reliable hallmarks of Nigerian scam operations. The list is not all-inclusive, and scam operators are constantly weaving new elements into their schemes. The best rule to follow is that any unsolicited business proposal originating from Nigeria be carefully checked out before any funds are committed, any goods or services are provided, or any travel is undertaken.

"How Do the Scams Work?"

Nigerian business scams are confidence schemes, designed to exploit the trust you develop in your Nigerian partner and to bilk you of goods, services or money. The scams are flexible, and operators adapt them to take the greatest advantage of the target (you). It is not possible to describe here how each of several hundred different scams works, but here are brief descriptions of the most common schemes.

Money Transfer: The operator claims to have a large sum of money, usually millions of dollars worth of ill-gotten gains, which needs to be transferred to a "safe" bank account abroad. The Central Bank of Nigeria is often, though by no means always, mentioned. You, as the bank account owner, are promised a percentage of the huge sum, just for use of your account. You may be asked to provide blank, signed invoices, letterhead and bank account information, or to send money for transfer taxes. Some businesses have found their accounts looted by the persons to whom they sent account information.

Fraudulent Order: The operator usually places a small ($1000 or so) order, paying with a genuine cashier's check drawn on a European bank. The operator then places another, somewhat larger order, again paying with a genuine instrument. Then, you receive an order by DHL. Your Nigerian partner urgently needs a large quantity of your product air-shipped. Confident in your partner, you ship, but, this time, the cashier's check (which looks the same) is a fake. Experienced U.S. businesspeople today usually require either full payment in advance of shipment or an irrevocable letter of credit confirmed by a U.S. bank.

Charitable Donation: The operator offers to donate to your organization, asking for bank account information (see Money Transfer, above). Then, the operator loots your account or asks for advance payment of a fee to pay inheritance taxes, various government fees and taxes, or to ensure conversion of naira into dollars.

Government Contract: The operator claims to have a Nigerian government contract and needs your company's expertise to carry out the job. The operator scams you by collecting thousands of dollars in "fees" before you can do business. When fees are legitimate, they are published by Ministries and do not exceed $215.

Crude Oil: The operator claims to have an allocation of crude oil to sell you - cheap. Sometimes, the operator claims to be working on behalf of the Nigerian National Petroleum Corporation. Then come demands for various fees to supply you with the crude; of course, you never get your cargo. The Crude Oil Marketing Division of the NNPC is the only authorized seller of the Corporation's crude. Businesses lacking experience with Nigeria's petroleum industry should approach with great caution any proposal involving crude oil sales.

Business Opportunity: The operator convinces you to explore a business opportunity by visiting Nigeria. Once you arrive, the operator takes charge of your life, trying to keep you from contacting friends, family, or the U.S. Embassy. By various means, sometimes including violence or threats of violence, the operator extracts money from you. This type of scam becomes particularly dangerous for a victim who has entered Nigeria without a valid Nigerian visa, issued by a Nigerian Embassy or Consulate. All travelers must have a visa prior to arrival in Nigeria and must pass through immigration formalities upon entry into the country. Letters addressed to immigration officials have no validity. Anyone telling you otherwise is either misinformed or a scam artist.

Conversion of Hard Currency (Black Money): The operator shows you a large sum of bills-purportedly U.S. dollars that require cleaning to remove the black waxy material. You are asked to provide money for the cleaning in return for a commission. Of course the bills are not real and you end up with a suitcase of blank paper.

Purchase of Real Estate: Operator offers to serve as broker in selling real estate that either is not for sale or is nonexistent. You are asked to pay the broker's commission.

Clearinghouse: To add credibility to business scams in Nigeria, Nigerian and non-Nigerian criminals serve as third parties claiming to be clearinghouses or venture capital organizations for the Central Bank of Nigeria. These clearinghouses launder your money or divert it directly to criminals in Nigeria.

"How Can I Check Out a Business Proposal?"

If you are in the U.S., contact the Nigeria Desk Officer at International Trade Administration, Room 3317, Department of Commerce, Washington, DC 20230. (Tel: 1-800-USA-TRADE or 202-482-5149, fax: 202-482-5198).

If you are in Nigeria or elsewhere abroad, contact the Commercial Section (FCS) at the U.S. Embassy in Abuja, 9 Mambilla, Maitama District, Abuja, Nigeria (Tel: 234-9-523-0916) or Consulate General in Lagos, 2 Walter Carrington Crescent, Victoria Island, Lagos, Nigeria (Tel: 234-1-261-0050). The Consulate General's e-mail address is lagoscons@lagossf.us state.gov.

"What If I Think I am Already Involved in a Scam?"

If you are in the U.S., contact the Nigeria Desk Officer at the Department of Commerce (see address above). You may also wish to contact the local police, as well, if threats have been made against you.

If you are in Nigeria, contact the Consular Section of the U.S. Embassy (see address above). Marine Guards are present at the Embassy 24 hours per day and can alert a duty officer if you telephone or visit outside of normal working hours.

The U.S. Embassy will try to help you leave Nigeria unharmed, perhaps including regularization of immigration status, replacement of your passport, communication with relatives in the U.S., and, if necessary, provision of an emergency repatriation loan.

To date, however, the U.S. Embassy has never been able to recover a scam victim's money.

General Travel Information

Before you leave, check for current information on Nigeria by calling the Department of State's Bureau of Consular Affairs' Office of Overseas Citizens Service's travel information line (see information below). Upon arrival in Nigeria, check in with the Consular Section of the U.S. Embassy in Abuja or the Consulate General in Lagos.

The State Department issues Consular Information Sheets , Public Announcements, and Travel Warnings. Consular Information Sheets are issued for every country in the world. They include such information as the location of the U.S. embassy or consulate in the subject country, health conditions, political disturbances, unusual currency and entry regulations, and crime and security information. Travel Warnings are issued when the State Department decides, based on all relevant information, to recommend that Americans avoid travel to a certain country. Public Announcements are issued as a means to disseminate information quickly about trans-national and/or relatively short-term conditions which would pose significant risks to the security of American travelers.

 

Top Ten Tips for Travelers

1. Make sure you have a signed, valid passport and visas, if required. Also, before you go, fill in the emergency information page of your passport!

2. Read the Consular Information Sheets (and Public Announcements or Travel Warnings, if applicable) for the countries you plan to visit.

3. Leave copies of your itinerary, passport data page and visas with family or friends at home so that you can be contacted in case of an emergency.

4. Make sure you have insurance which will cover your emergency medical needs while you are overseas.

5. Familiarize yourself with local laws and customs of the countries to which you are traveling. Remember, while in a foreign country, you are subject to its laws!

6. Do not leave your luggage unattended in public areas and never accept packages from strangers.

7. While abroad, avoid using illicit drugs or drinking excessive amounts of alcoholic beverages, and associating with people who do.

8. Do not become a target for thieves by wearing conspicuous clothing and expensive jewelry and do not carry excessive amounts of cash or unnecessary credit cards.

9. Deal only with authorized agents when you exchange money or purchase art or antiques in order to avoid violating local laws.

10. When overseas, avoid demonstrations and other situations that may become unruly or where anti-American sentiments may be expressed.

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