Saturday 1 December 2012

Organized crime

When most of us think of a scammer we probably think of a guy on his own in an Internet café in downtown Lagos, desperately trying to keep up with the emails he’s receiving from gullible fools who want some of his fictitious inheritance.

In fact it’s not as simple as that. Just as petty criminals often develop into larger criminals and any small-scale crime is soon incorporated into a larger organisation, scammers have been absorbed by the much bigger brother. Organised crime.

They may not yet match the Mafia, the South American drug cartels and the Oriental Tongs and Yakuza, but the West African scam crime organisations are becoming well organised. You see that from the way they adapt and evolve to exploit the latest trends and fashions. Originally they just focussed on the conventional “my late father left millions of dollars in a foreign bank account and I need your help getting it out” approach, but soon moved on to fake lotteries wins, fake job offers, the invitations to fake conferences and the fake romances with rich, good-looking people who fall desperately in love with total strangers they’ve only ever met on the internet. That’s a sign of a smart organisation reacting to consume pressure.

Instead of picturing that lone scammer in the Internet café, imagine instead a focus group of high-level scam leaders plotting their new strategy for stealing people’s money, using flipcharts, PowerPoint presentations and laser pointers. In fact just like any meeting in the boardroom of a bank.

Another scam that’s well organised is the whole fake universities industry. You may think that they’re all separate and distinct scams but a lot of them are actually part of the same family. A company called the “Organization for Global Learning Education”, which was created by a crook called Salem Kureshi operates from Pakistan. This organization includes a range of fake establishments, including the ones calling themselves Belford, Northern Port, Panworld, Headway, Corllins, Ashwood, Rochville, MUST, OLWA and McFord “universities”. All of them are nothing more than a credit card charging mechanism attached to a shipping address in the Middle East that sends fake certificates to the naïve or criminal people who’ve bought one of their fake degrees.

Like conventional scammers, this is no longer a small operation, it’s a major crime organization. Before you think it’s not relevant to you and me here in Botswana just take a look around. I suspect that if you work in any large organization you probably know someone, or you know someone who knows someone who’s bought a fake degree. I know I do. Yes, before you ask, the one I’ve met WAS fired from his job as a result of this. He’s lucky not to have been prosecuted for fraud because it IS a crime to obtain a financial benefit from a lie. Claiming to possess a degree when in fact it’s a fake is fraud.

Then there’s the more advanced, more intricate criminal operations. Ponzi schemes. A Ponzi scheme is actually very simple. You recruit people into your scheme promising them enormous financial returns but what actually happens is those returns come from the investments of later recruits. Your small return this month comes from the money I paid in when I joined. My return next month will come from the investment of the next victim. There is no actual investment in a Ponzi scheme, just a flow of money to one victim to a more recent one. It’s “robbing Peter to pay Paul”.

The biggest Ponzi scheme that affects us in Botswana at the moment calls itself EurexTrade. I’ve heard in the last week of several people who have “invested” over P100,000 in this scheme. One reader’s mother invested P500,000. I’ve also heard from reputable financial advisors and investment companies that their clients are cashing in their genuine investments to throw them away in this scheme. The amounts of money flowing towards this scheme are staggering.

Again though, this isn’t just a guy in an Internet café doing this. This is organized crime. In fact it’s particularly nasty organized crime.

EurexTrade is a company registered in 2004 in Panama. It’s owned by three other companies, Ireland & Overseas Acquisitions Ltd, Milltown Corporate Services Ltd and Inhold Ltd.

It’s the first two companies that are most interesting. In 2007 these two companies, both of which are registered in the British Virgin Islands, were involved in chartering a ship that travelled from Eastern Europe to Mombasa in Kenya. There’s nothing particularly wrong with that except that the cargo appears to have been weapons destined for rebels in South Sudan who were then under an international arms embargo. Let me put this simply. The people behind EurexTrade appear to be gun-runners.

They’re also career Ponzi scheme operators. The same two companies were behind a defunct Ponzi scheme called Rockford Funding that the US Securities and Exchange Commission claimed had stolen over $10 million from “investors” and transferred to banks in Latvia. They’ve also been involved in shady dealing with oil rigs and pharmaceuticals. Are these the sort of people you’d want to trust with your life savings? I think not.

The lesson is simple, at least I think it is. If you want to help fund the illegal running of guns, extortion and corruption, then yes, you should give your money to EurexTrade, you really should. However, if you’re old-fashioned like me, you’ll probably prefer to put any money you save somewhere where it might actually make me some money, rather than make just criminals rich.

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