You cannot trust anyone --- “One may smile, and smile, and be a villain.”
While not everyone has heard of this quote from William Shakespeare’s famous play Hamlet, you will have to agree that it fittingly describes the Hamlet-esque story that you find in your email inbox out of the blue: his father having passed away, a Nigerian prince’s throne was usurped by his uncle and he now needs your help to transfer his funds out of Nigeria, in return you would keep a portion of the funds. All you have to do is to give him your personal details (so the Prince knows who you are), your bank account number (for you to temporarily “safekeep” his funds), and of course, to pay a fee in advance.
Yes, this is apparently a scamming technique that has been widely deployed since the 1980s, and while every year there are still people who succumb to the temptation of windfall, more and more people are aware of the reality.
Fraudsters are therefore making use of a different modus operandi in recent years, one that is more specific instead of the “spray and pray” Nigerian prince model. Also carried out by way of email scam, fraudsters would first hack email accounts or compromise computers to obtain vital information, then tailor-make the fraud scheme to deceive the email recipients into paying them.
How do email scams operate?
In many cases that we came across, the victims are mostly trading companies with business counterparts all across the globe. The diagram below illustrates how the scheme operates.
What to do next?
The victim’s effort to recover the money is always a race against time. It is therefore always advisable to act as soon as possible, and ideally within 24 hours from the fund transfer, as thereafter the fraudster is very likely to have already dissipated the funds. If law enforcement authorities or banks have not decided to freeze the relevant accounts, the victim should seek assistance from lawyers to apply for a Mareva Injunction (i.e. asset-freezing order) on the civil route to prevent dissipation.
If the money is successfully retained in the bank account pursuant to the injunction, civil proceedings should be commenced against the bank account holder to recover the money in equity. The fraudster is very unlikely to contest the proceedings (by this time he probably has absconded) so the victim can apply for a monetary default judgment against the fraudster unhindered. To actually recover the money, the victim then needs to apply for a garnishee order, which once granted will compel the bank to directly transfer the money from the fraudster’s bank account to the victim.
Recent case law suggests that other than the conventional way of obtaining a monetary default judgment, the victim might also seek a declaration in default to assert a proprietary claim over the funds in the fraudster’s bank account which, if succeeds, would lead to a vesting order. The bank will then be compelled to immediately transfer the money back to the victim without the need to wait for the garnishee order.
If the money has already been dissipated by the time the injunction is obtained, the victim will have to take extra steps to “trace” the money. A discovery order for banker’s record needs to be obtained first, so that the victim can ascertain the flow of the money and track down where it was transferred to. Most of the time it would be a cross-jurisdiction transfer, which adds another obstacle to the victim’s recovery. The victim will have to engage lawyers in that jurisdiction to commence new proceedings against the new, foreign recipient of the money, and also conduct further discovery and tracing to ascertain the latest whereabouts of the money. As one may see, if the money cannot be frozen in time, the matter will be very complicated with time and costs spiraling out of control, and at the end of the day, the fraudster may still be one step ahead of the victim so that the victim cannot recover the stolen money. This is exactly why the victim is advised above to act as soon as possible.
Prevention is better than cure
It is always better to take preventative measures rather than looking out for remedies. You may check out some practical preemptive measures from the Police’s article “Tips for Smart Netizens” which is available at http://www.police.gov.hk/ppp_en/04_crime_matters/tcd/tips.html
What OLN can do for you
OLN has acted for the victims in many email scam incidents, and electronic fraud cases generally. On most occasions, OLN has successfully obtained the Mareva Injunction and recovered a substantial portion of the defrauded money (if not entirely). With extensive experience in civil litigation, we will be able to assist you in a swift and efficient manner.
Another fitting quote by William Shakespeare in Henry VI would be appropriate to conclude this article:
“Wise men ne’er sit and wail their loss, but cheerily seek how to redress their harms.”
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.