by Alan Thornhill
A fax, inviting investment in a Nigerian oil company, might well raise eyebrows.
But an Australian woman, we will call Mrs Smith, was enthusiastic.
Over the next eight years, Mrs Smith and her husband invested $3.8 million in that company which, incidentally, did not exist.
That was just the start of the story.
The money they sent, always by a particular route, in amounts of less than $10,000, attracted official attention, anyway.
And a report, just released by Austrac, noted that the authorities tried to help Mrs Smith and her husband.
“Law enforcement officers contacted the husband and wife on numerous occasions to warn them that they were being scammed,” the Austrac report says.
But the Smiths were not shaken.
“Convinced the scam was a legitimate investment, the husband and wife continued to send funds,” the report says.
But the story didn’t end there.
When their own money ran out, Mrs and Mr Smith “dishonestly involved friends and associates in the scam,” Austrac said.
“As a result, more than 20 victims lost more than AUD6 million, with some victims losing their houses and businesses.”
What kinds of tales, though, did the Smiths tell their friends, to persuade them to invest in this way?
This is where the story gets a little bizarre.
For, as the report notes: “The husband and wife convinced friends there were two large boxes of cash valued at $US22 million secured in a building at the Reserve Bank of South Africa.
“ They claimed the cash had been marked using a special black coating (purportedly to avoid detection by customs).
The Smiths told their friends that this coating needed to be removed with a special chemical.
“ In an attempt to extract more money from victims,” the report says, “the suspects claimed that the cost associated with the money cleaning process was exorbitant.
“This is a variation on a scheme commonly referred to as a ‘black money scam,’” the report adds.
“In this instance, it appeared to be an element of the larger advance fee fraud, used to maximise the amount scammed,” Austrac said.
Predictably, the Smiths were both jailed.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Monday May 20
The Dow Jones Index rose 121.18 points Friday,New York time) to 15,354.40
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