Extracts from
Understanding Online Investing
by N E Renton

Some examples of fraudulent schemes are set out below. They will illustrate the dangers facing unsuspecting investors.

Some schemes involve companies registered in or otherwise associated with the grand-sounding "Dominion of Melchizedek". There is no such country in real life - it exists only on the Internet (although admittedly it does so in a most impressive way).

Then there are schemes involving a body variously calling itself the "World Currency Council" or the "International Exchange Alliance". It claims to have discovered a "secret flaw" in the international money system, exploitation of which allows people to make large sums of money as often as they wish, details of which can be obtained on payment of a relatively small fee (which sounds attractive to the curious). There is, of course, no such flaw.

There is also the much publicised fraud emanating from Nigeria. This scheme has been around on paper for years, but it is now being propagated to potential investors by e-mail.

The message purports to come from a group of top officials of the some government agency in Nigeria. They claim to have defrauded their own government of $US31 million or somesuch. They are seeking the use of the investor's bank account in Australia in order to launder the money. In return they offer a 20 per cent share of this large sum.

Those who show interest are then asked to provide various sums in advance, to cover some necessary expenses and bribes. This happens more than once.

Correspondents who by their own admission go in for defrauding their own government seem to lack proper business credentials. It is not clear why any investor who deals with such criminals would expect to be treated honourably by them.