Desperate banks fall for the 419 advance-fee fraud

The FDIC has issues a special alert warning that America's debt-haunted, cash-strapped banks are falling prey to conmen working the advance fee fraud, the same scam used in the familiar "Nigerian prince" or "419" scam. The banks fork over big bucks to supposed high-flying investors who are supposed to come through with large sums in return, but who vanish into the ether instead.

The FDIC has become aware of multiple instances in which individuals or purported investment advisors have approached financially weak institutions in apparent attempts to defraud the institutions by claiming to have access to funds for recapitalization. These parties also may claim that the investors, or individuals associated with the investors, include prominent public figures and that the investors have been approved by one or more of the federal banking agencies to invest substantial capital in the targeted institutions. Ultimately, these parties have required the targeted institutions to pay, in advance, retention and due diligence fees, as well as other costs. Once paid, the parties have failed to conduct substantive due diligence or to actively pursue the proposed investment.

Banks Desperate For Funds Victimized By Con Men (via CSM)

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  1. I’m sure that those foolish bankers will make good their errors out of their own pockets.

    What?  No, really?

    1. This appeared in my inbox today. It may help:

      The United Nations Compensation Commission (UNCC) in affiliation with Federal Bureau Of Investigation In United State Of America has made available a total of $863,725,490.00 to 27 governments and two international organizations for distribution to 370 successful claimants who has being Victims of Internet scam. This payment is made under the third phase of the payment mechanism established by the UNCC Governing Council and the Government Of the United State. The truth behind your delayed payment is that you have been dealing with fraudsters in Nigeria, London etc. And you really need to stop contacting them now else they will rip you dry until you dont have even money to buy food.

      I will happily forward it to the hapless bankers so that they may get their monies back.

    1. There’s skadefryd in Norwegian, skadeglädje in Swedish, vahingonilo in Finnish, and another in German I think, which eludes me at the moment  :-P

      1. @MrRocking:disqus
        @niktemadur:disqus

         Schadenfreude: in German (and in English since 1990), though in English it’s not a widely known term.

        1. It’s pretty widely known to people who’ve seen Avenue Q, even if they didn’t before.  (And if you haven’t, do.)

    1.  Yes. Despite repeated demonstrations that random number generators/toddlers/quite possibly that fuckin’ world cup octopus do fairly evenly on the markets, people do, indeed pay these fuckers. Because we’re all stupider than an octopus.

  2. “Mr Jones, can you tell this committee what happened to the 2 billion dollars you were entrusted with?”

    “Well, Mister Senator, you see, there was this email and I . . . “

    1. *stares*  That would never happen, they are much more likely to sue AOL for allowing the spam to make it to their inbox.

  3. DEAR SIR:

    I AM TIMOTHY GEITHNER, SECRETARY TREASURY OF THE UNITED STATES AMERICA.

    I HAVE RECENTLY COME INTO POSSESSION OF SEVEN HUNDRED BILLION DOLLARS MISLAID BY MISTER BENN BERNANKY.

    AM PREPARED TO DELIVER TO YOUR BANK THE SUM OF FIFTY BILLION DOLLARS PROVIDED THAT YOU CAN DEMONSTRATE GOOD FAITH AND COLATERAL.

    PLEASE EMAIL TO TURBOTAXTIMMY@TREAS.USA.GOV.

  4. Y’know, if the banks were forced to start acting like _banks_ again — lending money to people with decent credit at reasonable rates — rather than gambling with the money, we’d all be better off.

    Long past time to re-regulate. Heck, I’ve heard _bankers_ saying that.

  5. Falling for one of these scams should lead to the immediate take over by the FDIC — no second chances, do not pass go, you just failed.

  6. Ultimately, these parties have required the targeted institutions to pay, in advance, retention and due diligence fees, as well as other costs.

    There’s the problem (or is it merely a symptom?) – when did due diligence become a commodity?

  7. The banks that are that desperate have mostly been gambling on derivatives they don’t understand and Credit Default Swaps on securities that are designed not to be understood.  It’s bad enough that many of them were doing mortgages with inadequate down payments during the housing bubble, so that when housing prices declined they put themselves at significant risk.

    With all that, what’s a little 419 fraud on top…

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