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Author: The Economist print edition
Posted to the web: 6/12/2005 6:26:27 PM

Why Nigerian fraudsters now like working in South Africa
“YOU want rubies! We can do business!” The anonymous caller promised a lucrative deal over the phone: stump up dollars in advance and he would produce a glittering hoard in Johannesburg. But your correspondent refused; so the caller instead produced some colourful abuse, sneered at British sexual prowess, and hung up. It is rare for an attempted African scam to be executed so inelegantly. Advance-fee frauds often lure victims to part with tens of thousands of dollars on the promise of huge, but somehow plausible, later gains. Nigerians, especially, are renowned for elaborate and persuasive tales: my uncle the president died leaving me millions to smuggle to your country; let me use your bank account to hide the cash and you will get a slice; oh, and pay me a few thousand dollars in advance for handling fees. But Nigerian fraudsters are becoming too well known. Their ruse is famed world-wide as the 419, after the Nigerian legal code it broke. Nigeria's government now has an agency—the Economic and Financial Crimes Commission—to fight them. Though underfunded, it claims the arrest of hundreds of con-artists and the recovery of hundreds of millions of dollars in just two years. A trial is underway in Nigeria of three people accused of cheating a bank in Brazil of nearly $250m. The bank has subsequently gone bust. Would-be victims are learning that dubious deals from Nigeria are not to be trusted. The answer: outsourcing. South Africa's intelligence authorities report a flourishing industry of advance-fee scams, mostly carried out by illegal Nigerian migrants. Last year foreigners in the country reportedly lost more than 100m rand ($13m) in such scams; the real figure is likely to be much higher since many victims are too embarrassed to tell. One recent ploy promised millions of dollars would be smuggled from white farmers in Zimbabwe in return for a fee. Some 250 have already been arrested for this scam. South Africa is popular with scammers because it is a business hub, the flow of foreign currency is large and fast, and—until now—it was not tainted by 419 con-men. But Nigeria's president, Olusegun Obasanjo, has called the frauds a “great embarrassment” to his country. A bigger cost is that outsiders have become warier than they otherwise were of doing legitimate business. South Africa be warned