David Selwyn, head of forensic accounting at HW Fisher, says: "This is one of a number of scams that are doing the rounds. They are targeting non-commercial organisations, whose financial controls tend to be weaker than in businesses, often using volunteers, with not the same separation of duties. Controls may be the last thing charities think about, making it much easier to perpetrate deception with large sums of money passing through the organisation."
Charities are being asked by the fraudsters to supply bank account details to supposedly enable banker's drafts to be raised, for a large bequest to be paid to the charity. As Mr Selwyn points out, this seems a reasonable request, made more plausible by the letter coming from an apparently legitimate legal practice in Nigeria.
But the fraudsters use the bank account details to forge withdrawal authorisations from the account, copying the signature on the letter in the expectation that the sender is a bank signatory.
The fraudsters exploit the poor postal and telephone links with Nigeria, making it difficult to check whether the senders are a legitimate legal firm. They usually ask for all communications to be conducted by fax. The gang has also forged letters purporting to be from the Central Bank of Nigeria to give the fraud apparent validity.
Mr Selwyn says that smaller charities are now being targeted, after previous criminal campaigns had focused on larger charities and businesses. Oxfam, Christian Aid and Cafod were each approached in an earlier campaign, being asked to pay comparatively small administrative fees to allow much larger legacies to be paid over. Christian Aid was asked to send pounds 7,500 to unfreeze a bequest of pounds 150,000.
A Cafod spokeswoman admits that it "just missed being taken in" by the fraud. Richard Miller, the deputy director, says: "The clever thing was that the sum of money asked for was plausible." The charity actually received a banker's draft for pounds 150,000, but found on presentation that it contained fictitious account details and was worthless.
Canadian and American churches have lost thousands of pounds in the fraud. The Fraud Intelligence Unit at the British Bankers' Association is aware of at least two charities that had been duped into providing bank details to the fraudsters.
One American lost $4m in a related fraud, and many of the largest losses have been incurred by businesses in Britain and other western countries. Companies have been approached for help with avoiding Nigerian exchange controls by processing payments through their own bank accounts, while taking a generous commission. In the event they make the payments out of their accounts, but no legitimate payments are ever received.
The fraud is an embarrassment not only to the organisations that lose money, but also to the Nigerian government and the Central Bank of Nigeria. The Central Bank last month went to the extraordinary lengths of placing a large advertisement in the Financial Times warning British organisations of the "advance fee fraud/telefax scam", and of the fraudulent use of Central Bank officials' names to give false credibility to proposals. The Central Bank's statement added that victims were themselves to blame, "driven by greed and the urge for quick money".
No one in Nigeria's High Commission was available to comment on why the country was so popular with fraudsters, who may not be Nigerian but who use the country as the criminal equivalent of a flag of convenience in shipping. David Selwyn suggests: "Nigeria's controls are not that well developed."
The fraud is no longer exclusive to Nigeria, with similar correspondence now being received from elsewhere in Africa. But it is still predominantly associated with Nigeria, and has been watched for some years by the Nigeria desk at the Department of Trade and Industry. A DTI spokeswoman says: "There are a number of different types of technique being used of getting people to pay money out."
Scotland Yard says that although it is a continuing problem, only a comparatively few naive people have been caught out. A spokeswoman adds: "We have no jurisdiction in Nigeria, so our role here is crime prevention."Reuse content