Advance fee fraud gets its name from the fact that an investor is asked to pay a fee up front or in advance of receiving any proceeds, money, stock or warrants in order for the deal to go through. The fee may be in the form of a commission, regulatory fee or tax, or some other incidental expense. These secondary advance fee schemes work very similarly to boiler room operations, the difference being that an advance fee scheme generally targets investors who already purchased under performing securities, perhaps through an affiliated boiler room, offering to arrange a lucrative sale of those securities, but first requiring the payment of an advance fee.
One type of advance fee fraud is known as a Nigerian Advance Fee Fraud. In these schemes, someone pretending to be a Nigerian official or business-person asks ordinary individuals and companies to help move millions of dollars out of Nigeria in exchange for high, hassle free profits. The fraudsters solicit investors through mass mailings, faxes, phone calls, and emails.
The U.S. Secret Service has set up a task force for addressing only Nigerian Advance Fee Fraud schemes.If you have suffered a financial loss from a Nigerian Advance Fee Fraud scheme, please contact your local U.S. Secret Service Field Office.