Thursday, 1 April 2010

The Voice - Consumer's Voice - First Morgan Capital - a scam

Dear Consumer’s Voice

I have been looking for a joint venture partner for a business project. A friend advised me to join a business networking portal called “Venture Capital and Equity for Africa”, which is a very good networking website for African entrepreneurs and investors.

In December last year I got a call from a company called First Morgan Capital Group and they explained that they can offer loan facilities through their private investors. In February I was informed they were offering me a loan of US$ 323,600 (just over P2 million). I was now looking forward to it as I have spent money and time for almost 6 months doing research on my proposed business project. They then told me that they needed a security deposit of 7% of the total loan value. However they told me that before I can receive the loan I have to deposit a 7% loan security into an offshore account based in Singapore. They are explaining that the deposit will be held by these offshore bank to protect the private investors and my company, and also the security can be used if there any loan repayment arrears, but it will be refunded (with 7% interest) after the loan has been paid fully.

So far everything looks legit, but I am very skeptical and am uncomfortable making a deposit into an offshore account but I desperately need the startup capital!

I am kindly asking on how best you and The Voice can assist on this matter in finding out if I am being scammed. I don’t want to lose my money through a scam and neither do I want lose these much needed capital-injection opportunity.

I think you’re very sensible to be skeptical. This is extremely suspicious. To be honest I don’t know anything about venture capital companies run their businesses but I bet it DOESN’T involve recipients being required to pay money to total strangers in foreign countries before they get to see the investment. I bet it also doesn’t involve the investor giving away enormous sums of money to total strangers that they’ve never actually met in the flesh.

First Morgan Capital has a very impressive looking web site but there are some fairly simple clues that they are less legitimate than their web site suggests. For instance why do they give an office address in Zurich, Switzerland that simply doesn’t exist? Why is the picture they use of their office in Lima, Peru taken from the Wikipedia page on Peru? Why are both their Swiss and Peruvian phone numbers answered by answering machines in English when in Zurich they speak mainly German and in Peru they speak Spanish?

On another page they give a list of companies to whom they claim to have lent money. However why don’t any of them actually exist?

Knowing by now that this was a scam I nevertheless emailed First Morgan Capital and asked them about how they work, who their backers are and asked whether they could give me examples of real companies in which they had invested. Quite rapidly I got an email from someone claiming to speak on their behalf but curiously using a free email account.

Unfortunately he wasn’t able to give me any useful information about the “company”. However he did give me the name of a company director in Jamaica he claims they lent money to. Curiously the Jamaican phone number he gave doesn’t exist. Neither does the company or it’s director.

Let’s face facts. “First Morgan Capital Group” is a work of fiction. They don’t really exist. This is yet another “advance fee” scam. All they want is that 7% “loan security” which in your case is an awful lot of money, almost US$ 23,000, nearly P150,000.

We later received further evidence that this was a scam when the consumer in question contacted us to say that First Morgan had again phoned him, claiming to be in Peru but from a phone number with a Hong Kong dialling code. The scammer claimed that he was working with a Canadian bank that would be the ones who would release the funds once he had paid them the loan security. Isn’t it curious that the contact at the Canadian bank doesn’t seem to exist either?

If you had actually given them the money it’s almost certain that you would never have heard from them again. However, what’s worse is there have been victims of scams who end up being double-scammed. They fall for it once and the scammers string them along and they end up paying more and more, in the forlorn hope that eventually they will get something back. This NEVER happens. The lesson from this is that old saying: “If you’re in a hole, stop digging”.

Fortunately the Voice reader who got in touch was sufficiently skeptical that he didn’t lose any money in this scam. He realised soon enough that it was unbelievable. However, how many less skeptical people have fallen for this and lost large amounts of money?

Be skeptical – it could save you a fortune.

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