information concerning money-laundering links with extremists in Kashmir and Bangladesh
Best known for their anonymous e-mails promising pie-in-the-sky fortunes in return for an immediate down payment, 419 scamming has exploded in India in recent years, says the report by Dutch financial intelligence organisation Ultrascan AGI. The scams are named after a section of the penal code of Nigeria, where they originated about 25 years ago.
“India is among the top five growing markets for Nigerian advance fee frauds (AFF or the technical name for 419 scamming),” Frank Engelsman, director of Ultrascan AGI, told HT in an e-mail.
India’s losses to such e-mail scams have jumped in the past few years. Ultrascan, which has experts in 69 countries, pegs Indian losses in 2006 at $32 million. It estimates that nearly 4,700 scammers are active and residing in India, about a 20-fold increase from 2006.
India is not only home to an increasing number of victims but has also become a base for scammers targeting other countries. As much as 80 per cent of the money scammers earn in India is shared with rings outside the country, according to the report.
Such fraud is also becoming a source of revenue for terror groups. The Nigerian al-Qaeda affiliate Boko Haram is known to have tapped the 419 system for funds.
Engelsman says Kolkata has emerged as a key 419 fraud centre. “We stumbled upon information concerning money-laundering links with extremists in Kashmir and Bangladesh,” he says.
The 419 scammers work the entire gamut of financial fraud including fake auctions, imaginary lotteries and fictitious service firms.
A staggering 78% of all counterfeit cheques caught by police globally are produced by 419 rings. India is among three of the largest counterfeit cheque-producing centres in the world.
Indians mainly fall victim to low-end scams offering fake visas, job offers and lotteries, says Engelsman. The commonest fakes visas offered are for Canada, Australia, Saudi Arabia and Britain.
Few of the Nigerian kingpins are ever caught and arrested. “Poor Indians are recruited to do 419 advance fee fraud front work, like opening bank accounts, registering companies with chambers of commerce, and receiving money transfers,” says Engelsman. They are also the ones who normally picked up by the police.
Over the years, Ultrascan has carried out thousands of studies of 419 victims. It has found that the group most likely to succumb to a 419 scam, especially in the West, is highly-educated professionals, particularly doctors.
They also found that people who have suffered an emotional trauma like the death of a child or a divorce are unusually susceptible to such fraud.
Ultrascan expects advance fee fraud to continue to grow in places like India and China because scammers have adopted a “moving East” strategy thanks to Asia’s fast rates of economic growth.
Ultrascan FIU Financial Intelligence Unit - A mixture of intelligence gathering, investigations, reputational risk mitigation and Innovative Technology in line of objectives. Focused on external information and stakeholder engagement, to detect exposure to financial crime risk.