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The Reshipping Scam
A public-private partnership sends an FBI agent to Nigeria to make some high-profile arrests.
More than 50 people crowded into a Lagos, Nigeria, street one day last spring, shouting in outrage and manhandling four local cops and an American FBI agent who were arresting a neighborhood kid they suspected of running online scams. “I thought we were going to have a riot,” recalls FBI supervisory special agent Dale Miskell. “The people started going nuts.” Neighborhood women felt especially protective of the 18-year-old boy being taken into custody, he says.
The officers broke free of what they say was a potential mob, escorted their handcuffed suspect into an armored Chevy Suburban nicknamed the “War Wagon” and made their retreat. “At certain times, you don’t want to hang around,” Miskell says.
The arrest was one of the 17 collars, all of them far from quiet or routine, that Miskell helped make during a 30-day trip to Nigeria that spanned April and May last year. It was his third journey to West Africa in the last two years to fight online crime. “In every arrest, these guys ran and fought,” Miskell says.
Nigeria and Ghana have earned notoriety for web crime, according to officials of the Merchant Risk Council, a not-for-profit group that’s helping authorities track scams there and throughout the world. Miskell was in Nigeria as part of a mission by the Internet Crime Complaint Center in Fairmont, W.Va., an organization formed in 2000 by the FBI and the National White Collar Crime Center, to fight international online fraud. He was acting on information provided by the Merchant Risk Council.
Miskell reports that arrests for cyber-crimes in Nigeria are rare. Both the Merchant Risk Council and the Internet Crime Complaint Center believe that cooperation among online merchants and law enforcement agencies made the arrests possible and could serve as a model for the future. Retailers can provide data that can indicate who’s committing the crimes, but have no law enforcement capabilities. And police agencies are not sources of information but have the means to investigate data and make arrests. “We look to this as a proven case where we can collaborate productively between private industry and law enforcement,” says Tracy Brown, director of Internet security for American Eagle Outfitters and Merchant Risk Council cochair and head of the council’s law enforcement committee. “We would welcome members all the way down to local law enforcement to partner with us on getting the bad guys.”
By now, online merchants have become wary of shipping merchandise to addresses in West Africa because so many customers in the region use stolen credit card information to make their purchases. But criminals are always on the alert for ways to circumvent fraud-prevention measures. Many in Nigeria have come up with ingenious schemes to dupe Americans into unwittingly cooperating with their rip-offs. Those schemes are known as “reshipping” and often start at a singles chat web site.
In a chat room, or on a singles phone line, a scammer establishes a relationship with a potential victim, often wooing her by sending her flowers or little gifts. Eventually, he gives her a story about hardships in Nigeria, including the inability for some reason or another to obtain American goods. He persuades her to agree to receive merchandise that he buys online, then reship it to Nigeria.
Once she agrees, the criminal uses stolen credit card information to buy goods online and have them shipped to his American girlfriend. The victim rewraps the merchandise and ships it to an address in West Africa. And so it goes until the victim gets tired of the long-distance romance, the criminal switches to a new victim or the victim herself gets in on the scheme and keeps the merchandise.
Criminals also have refined methods of preying on small businesses, Miskell says. A con artist in Africa might develop a relationship with a retailer who sells a relatively low-cost item, chocolates, for example. After becoming a trusted customer, the criminal then will ask the merchant to buy a high-value item, say computers, to reship to him in Africa.
If the small retailer protests that computers aren’t what he sells, the confidence man cites their working relationship, asks him to do it as a favor and offers to pay a small commission. The victim agrees, charges the computers to his own card, ships them to Africa and receives a cashier’s check from the scammer. Only later does the small business owner find out the check’s no good.
19,000 monthly complaints
Such problems plague a large number of Americans, says Miskell. During a single recent 90-day period, some 1,500 people in this country, either knowingly or unknowingly committing a crime, repacked expensive goods for reshipment to West Africa, he says.
Under Nigerian law, authorities are allowed to open packages as they arrive in the country. Miskell reports that every one of the 46 parcels he opened during a single day of his stay there had been reshipped to launder the merchandise. He says he could only guess about the legitimacy of the stacks of packages he didn’t have time to inspect.
Miskell had some idea which packages might be bogus, however, because of information he was receiving daily from his colleagues back at the Internet Crime Complaint Center. The center, or IC3 as it’s called, is staffed by about 40 employees of the FBI and 20 people who work for the National White Collar Crime Center. A U.S. Postal Service employee also works there to coordinate information exchange with his agency, and the center hopes to persuade the Secret Service to station a person there as well.
Because the non-profit National White Collar Crime Center is involved, the IC3 doesn’t have to treat the information it gathers as FBI intelligence, which could limit its ability to inform retailers of emerging trends. The center’s analysts sift complaints from consumers, merchants, associations and law enforcement agencies, compiling facts to build cases. Some 19,000 complaints about spam, phishing and reshipping are fielded in a typical month.