Spotlight on ‘Advance Fee Fraud’
| Pages | 97-103 |
| DOI | https://doi.org/10.1108/eb025685 |
| Date | 01 February 1995 |
| Published date | 01 February 1995 |
| Author | Alan Lambert |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 3 No. 1 — Modus Operandi
MODUS OPERANDI
Spotlight on 'Advance Fee Fraud'
Alan Lambert
WHAT IS ADVANCE FEE FRAUD?
Advance fee is a phrase — adopted over the years
— which has been applied to a variety of offences,
generally involving fraudulent activity in relation
to financing of large-scale projects, investments, or
huge currency transactions and, however well dis-
guised or described, involves the payment of
monies in advance of any agreed course of action
by the alleged financier or investor, ie the con-
man.
If that sounds complicated, it gets worse, as in
English law there is no specific offence of fraud.
Fraud is merely a word which describes a variety
of criminal activities (mainly criminal deception)
whereby through lies, deceit, cheating or other-
wise,
false promises are made and victims are
induced to part with money.
PROFILE OF THE CRIME
Over the years, many varied forms of advance fee
fraud have been seen. These have included:
yen/dollar currency transactions;
documentary letters of credit;
certificates of deposit;
'prime bank' promissory notes and guarantees;
loan arrangements;
highly profitable investment prospects;
purchases of
gold,
oil and other commodities;
variations of the above and many others besides.
Almost without exception, extremely attractive
terms arc offered as an incentive (or inducement),
including discounted currency rates, some other
discount, or loans being available over unusually
long periods. The source of funds is often falsely
reputed to be a member of the Saudi Arabian
Royal Family, anxious to protect his anonymity,
but equally anxious to provide large-scale funding
for worthy projects. It is therefore virtually impos-
sible to check on the bona fides of the information.
The International Chamber of Commerce
(ICC) has, over the years, issued a considerable
number of leaflets containing advice and proce-
dural guidelines, covering many areas of
international trade. Each leaflet is given a reference
number, for example ICC 290. The advance fee
fraudsman will, however, mistakenly quote these
numbers or have them printed on forged promis-
sory notes, with the intention of duping an
intended victim into believing that their 'ICC 290'
is,
in fact, a genuine promissory note, approved by
the International Chamber of Commerce.
(Examples of such a fraudulent promissory note
appear on the next page.)
As with any other growth industry, advance fee
fraud has developed a culture and language all of
its own. And there are many thousands of individ-
uals around the world who, although they may
have never met, can easily identify with each other
from the wording of documents or the language
used in fax messages.
So common has the use of this language become
that it has permeated through to the reputable
institutions where staff will often innocently dis-
cuss potential large-scale transactions with callers,
without realising that such language is being used.
This is often due to the fact that many phrases
used by the fraudsters bear a close resemblance to
recognised language, and even though this is
bogus, reputable staff mistakenly apply their own
understanding to the situation.
An example of this is the use of the term 'prime
bank'. 'Prime bank' is rarely, if ever, used by the
major financial institutions in legitimate business
transactions around the world. And yet, if someone
from such an institution were asked what they
understood by the term 'prime bank', he or she is
likely to explain that it is one of the major banks
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