Well that didn’t take long. You know those Nigerian scams where someone emails you and asks you to help him spirit millions of dollars out the country, except you have to front him the bank fees? Well, it’s turned up in crowdfunding.
We are aware of a couple of instances like this: Company posts its offering on a crowdfunding site. Investor who claims to be a money manager contacts company for details. The investor may come from a respectable country where a lot of money managers are based, and it may have an online presence that seems to check out. Anti-money laundering and sanctions checks may come back negative. But then the investor raises an issue. It wants to invest a lot of money but it will have to do so in installments, because there are bank fees to be paid for transferring larger amounts. Rather high bank fees. Could the company front the investor those fees so the investor can make a large investment immediately? (There are of course many variations on this theme but they all involve money being sent offshore.)
Of course, there’s no logic to the fake investor’s suggestions. If you have millions of dollars in your possession, you don’t need to get someone else to front bank fees. If any such fees did exist (and they don’t) then a legit investor would simply have used them as an excuse to get a better deal on the securities it was buying.
I’m sure I don’t need to warn anyone who’s reading this not to fall for these scams. If something seems too good to be true, it isn’t true. But watch out for the time-wasting that attempted scams are going to drag you into.
And here’s a useful tool to help companies and platforms avoid the time-wasting scamsters: CrowdCheck’s CrowdScam service. We are compiling a list of people and entities who have tried this trick. To add to our registry of rogues or to check out someone who you have doubts about, email email@example.com. And watch out for CrowdScam.com, coming soon!