Miller Issues Warning:
Nigeria Counterfeit Check Scam

"Counterfeit cashier's checks are deceiving Iowans who sell items on-line. This con-scheme has new elements that make it an alarming new threat."

Des Moines. Iowa Attorney General Tom Miller warned Iowans to avoid a scheme that costs victims thousands of dollars when they are duped into wiring money to con-artists in Nigeria. People selling merchandise on the Internet receive and deposit a U.S. bank cashier's check, but days later it turns out to be a very impressive counterfeit, Miller said.

"This is a new twist, and it's ripping-off Iowans," Miller said. "We are concerned that it's much more likely to deceive people than the other Nigeria scams that have been around for decades."

For a "Consumer Advisory" bulletin on the scam, see: Nigeria Counterfeit Check Scam: Warning! Phony Cashier's Checks Cheat On-Line Sellers.

Miller listed the hallmarks of the new scheme:

• The victim is selling a used car or some other item via the Internet. A buyer based in Africa sends an e-mail message that he wants to buy the item.
• The buyer says he will pay with a cashier's check from a bank in the U.S.
• At the last minute the buyer has some story why the cashier's check will be much more than the asking price - thousands of dollars more. "Just wire the difference back to me," he explains, "-- after the cashier's check clears, of course."
• The victim thinks the cashier's check must be good when it's accepted by his or her bank and the funds are provided - but in a week or so the check turns out to be counterfeit.
• Unfortunately, the victim has wired thousands of dollars to Africa, never to be seen again.

The bank requires the victim to pay back all the funds provided for the phony check.

"I want to state in no uncertain terms that victims of this new scheme are not naive and they are not greedy," Miller said. "They typically are skeptical and careful. But this is a more perilous scam than the Nigerian e-mails we've all received for years that promise a one-third cut of $60 million if we will only provide a U.S. bank account for them to place the money. Yes, it's the same huge gang of perpetrators, but they're using new tricks," he said.

"Even the most skeptical consumer can be deceived, and it all comes back to the cashier's check supposedly from a U.S. bank," Miller said. "First, the checks are superb facsimiles -- counterfeit, but so authentic that they often fool bank personnel who study them. Second, people think the cashier's check must be good when the bank gives them the money - especially if they insist they are skeptical, as many victims do."

Miller issued the warning at a news conference at his office in Des Moines. He was joined by victims of the scheme: Larry Pegg of Des Moines, who lost thousands of dollars, and Shawn and Jeff Mosch of Bloomington MN, who lost $7200 to the scam - but who are fighting back by warning others and supporting victims through their own web site, "ScamVictimsUnited." (On the Web, go to http://www.scamvictimsunited.com/news.htm .)

Paul Johnson, Resident Agent-in-Charge for the U.S. Secret Service Iowa/Nebraska office in Omaha, also participated. The U.S. Secret Service is the lead U.S. agency battling Nigeria scams. (See their Web site for background: http://www.secretservice.gov/alert419.shtml .) Johnson led the Secret Service's Nigerian Organized Crime Unit from 1997-99 - and helped open the unit's office in Lagos, Nigeria, in 1998. Johnson has traveled several times to Nigeria.

Tips for Consumers:

"We just pieced this together, and we consider it an urgent priority to warn consumers," Miller said. He advised consumers:

• If you are selling on-line, be extremely skeptical of any e-mail offers from Nigeria or Africa offering to pay by cashier's check. Reject it -- it's almost certainly a scam. Don't swallow any story that asks you to wire money abroad. Remember, a bank may make money "available" to you almost at once if you deposit a purported bank cashier's check, but that's NOT a guarantee the check is authentic. It still could be counterfeit, and the bank will hold you responsible for the money.



• If you are a VICTIM already of the Nigeria Counterfeit Cashier's Check Scam, contact the US Secret Service, the lead agency fighting this fraud. Call 202-406-5572, or write to: US Secret Service, Financial Crimes Division, 950 H Street, Washington, DC 20001. Send complaints to the Secret Service at http://www.secretservice.gov/contact_fcd.shtml. Also notify the Attorney General's Consumer Protection Division (515-281-5926, or www.IowaAttorneyGeneral.org.)
Get excellent info and support at www.scamvictimsunited.com/news.htm/.


• Spread the alert. Tell friends and associates. Ask buy-and-sell web sites to post warnings about the danger posed by the Nigeria Counterfeit Check Scam.

Fighting Back - Shawn and Jeff Mosch

"We are extremely grateful to Shawn and Jeff Mosch for helping spread the alert to Iowans and people all over the nation," Miller said. Late last year the Mosch's placed an Internet ad to sell a 1961 Buick. They were contacted by "an African car dealer" who wanted to buy. He said that someone in the U.S. owed him $8,800 and he would just have the person send a cashier's check to expedite the purchase. The Mosch's would deduct the $1600 price of the vehicle and send him the remainder of $7200 via Western Union -- once the check cleared - so that he could arrange and pay for transporting the vehicle.

The Mosch's thought it sounded "fishy," thought they'd never see a check anyway, thought a check would never clear if it did arrive. But the cashier's check did arrive soon by express mail, and their local bank accepted it and said it would clear within 24 hours - despite the Mosch's insistent questions. "I need to know when we can be sure that it is a good check, that it has cleared, and that it is real money that we can touch and use. I don't want to get a charge or have this come back and bite us in the butt," Shawn said. "They told me, 'Tomorrow afternoon, ma'am. No problems,' " Shawn explains.

The Mosch's waited not one day but two, and then wired the $7200 to a Ben Olawale of Magrove Transportation in Lagos, Nigeria. Later, when the cashier's check turned out to be counterfeit, the bank called the Mosch's and told them the check was counterfeit - and that they owed the bank $8,800. Ultimately, after much wrangling and the Mosch's insisting that the bank bore much responsibility for assuring them strongly that the check would clear, the Mosch's and the bank came to a mutual agreement for an out-of-court settlement to the situation. (Most other victims tell the Mosch's that banks insist on consumers replacing the funds deposited to them from Nigerian counterfeit checks.)

Miller said: "We are very impressed and appreciative of what Shawn and Jeff did next: they set up their very own web site called ScamVictimsUnited to warn others and support victims. (http://www.scamvictimsunited.com/news.htm ) They've had 12,000 hits in just three months. They've contacted authorities, urged on-line sales sites to post warnings, consoled and consulted with victims. And they've done all this just to help others avoid the shock and harm of big losses, humiliation, isolation, and even suspicion that they are part of a criminal enterprise. We tip our hats to Shawn and Jeff and thank them for driving down to Iowa to tell their story."

Click here for photo of Shawn Mosch and Iowa Attorney General Tom Miller, Feb. 11, 2003.

Fighting Back - How we can all help:

Miller said his office learned about the new elements of this scam - on-line sellers being victimized by sophisticated counterfeit cashier's checks - a few days ago, and learned of the Mosch's after that. "We're going to join them in sounding the warning to Iowans and others," Miller said.

Miller said many forces already are spreading the word -- including on-line web sites for selling cars, pure-bred animals, and other items. He said his office will be asking others to be sure they consider steps to help, if they haven't already, such as Internet warnings being posted by the Secret Service, Postal Inspection Service, and Internet Fraud Complaint Center operated in part by the FBI.

The Iowa Bankers Association said it is supporting efforts to prevent the scam. Miller said his office will share warning information and encourage financial institutions and associations to alert front-line staff to recognize the situation and take preventive measures - such as explaining that money being quickly "available" does not mean a check is valid until it has gone back to the originating bank and been cleared, which can take five days or sometimes much longer.

Miller said his office will spread the word to others, including livestock and dog breeders and associations, online car sales sites and other online sites, local law enforcement agencies, and other State Attorney General offices.

"We have to stop the scam on our end, here in Iowa and the U.S.," Miller said. "It's probably impossible to stop it at the source, in Nigeria and few other countries where it's spread, so we have to just spread the word and choke it off here."

Iowa Victims:

Miller said his office has issued warnings for years about the "Nigeria Letter Scam," but only discerned the new dynamics of the Counterfeit Check Scam a few days ago. "We already are putting the pieces together that this is harming Iowans. Larry Pegg of Des Moines joined Miller at the news conference. Miller said Pegg probably was one of the earliest victims of the scam - last summer. Pegg says he took the U.S. bank's cashier's check to a local branch of the bank and had several officials study it, who said it was good. He deposited the check at his own bank and then sent thousands off to Nigeria.

An Eastern Iowa dog breeder narrowly averted losing $4100 recently when she was to receive a check for $5000 for three bred puppies and wire the remainder to Africa. Another Iowa dog breeder is said to have lost thousands when a cashier's check for Great Danes "cleared" and she wired $4100 to Nigeria.

A Des Moines woman lost over $3,000 in a car-sale situation last month - and almost lost $3,000 more when the buyer asked to cancel the car purchase "since he needed the money because a friend's father died."

"We tend to think the Nigeria Letter Scam, which offers millions of dollars and still operates through a blizzard of e-mails, only snags one in a thousand or one in 10,000 victims," Miller said. "We are worried that this Counterfeit Check Scam may snag one in fifty or one in five - who knows? It poses a real threat and we all need to spread the alert."

- 30 -