Procurement Scams are Big Business

Procurement Scams in Ghana Nigeria and West Africa: A Rising Threat

Procurement scams are a growing problem in Ghana and other West African countries, where fraudsters target international businesses and individuals through sophisticated schemes. These scams often involve advanced fee fraud, where victims are lured into fake procurement deals with the promise of lucrative contracts. Scammers, posing as government officials or company representatives, use fake websites, forged documents, and high-pressure tactics to extract upfront payments, such as registration or processing fees. Victims are drawn in with promises of large-scale orders or partnerships, only to discover later that the entire operation is a ruse.

How Procurement Scams Operate

The typical procurement scam begins with unsolicited offers to foreign companies, often via email or fake online platforms. Scammers impersonate official representatives from government bodies or private businesses, presenting detailed proposals to buy goods or services. These proposals appear legitimate, sometimes even featuring official-looking documents and communications from supposedly high-ranking officials. The scammers insist on urgency, creating a sense of pressure to respond quickly.

Once the victim shows interest, the scammers escalate the scheme by requesting upfront fees for processing, registration, or various legal requirements. These payments, often described as necessary to facilitate the deal, are repeatedly requested under different pretexts, leading the victim down a path of continuous financial loss. In some cases, victims are even invited to travel to Ghana or neighboring countries to finalize the deal, only to face more demands or abandon the arrangement after realizing they have been scammed.

Common Red Flags

Businesses engaging with potential partners in West Africa should be aware of certain red flags that often accompany procurement scams:

1. Unsolicited offers for large-scale contracts or government tenders, especially when there’s urgency or pressure to respond.
2. Requests for advance fees, such as registration, legal, or banking fees, with promises of future lucrative payouts.
3. Communications that rely heavily on email or fax, with little to no physical verification of the business’s existence.
4. Fake documents with official-looking seals or signatures that are not easily verifiable.
5. Frequent requests for blank letterheads or sensitive banking information.
6. Claims of confidentiality or the involvement of high-level government officials to justify secrecy or the need for advance payments.

The Rise of Fake Entities

Many scammers create elaborate fake organizations and websites to lend credibility to their schemes. In Ghana and the surrounding region, fraudsters frequently impersonate organizations with names resembling legitimate government bodies or international development agencies. Entities like the “National Project Implementation Commission” or “West Africa Projects and Development Board” often have elaborate websites with detailed but completely fabricated information to deceive victims into believing they are part of legitimate business opportunities.

Why Procurement Scams Persist

The persistence of procurement scams is driven by economic hardship in West Africa, where some individuals turn to fraud as a form of financial survival. Scammers rationalize their actions as a necessary hustle in regions with limited job opportunities and high unemployment. The sophisticated nature of these scams—complete with official-looking documents and professional communication—makes them difficult to detect, allowing scammers to continue deceiving businesses and individuals globally.

Preventing Procurement Fraud

To protect against procurement scams in West Africa, it is critical for businesses to:

• Conduct thorough due diligence on any potential partner, using trusted verification services.
• Be cautious of unsolicited offers and requests for advance payments.
• Cross-check company information with official government or industry databases.
• Seek legal or commercial advice before agreeing to any upfront payments.
• Avoid sharing sensitive information, such as banking details or blank letterheads, without proper verification.

According to the International Trade Association

Ghana Scam and Fraud Alert

**Be extremely cautious of any business transaction that requires you to pay advance monies or fees (taxes, registration, procurement fees, bank fees, attorney fees, etc.).  If you have already lost funds or feel you may currently be involved in a scam, please contact your local Secret Service field office and file a complaint with the FBI’s Internet Crime Complaint Center (IC3).

Background

U.S. individuals and businesses periodically are lured into scams and fraud schemes originating – or just purporting to be — in Ghana or the surrounding region.  Cyber-crime takes many forms and can be perpetrated from anywhere; the individuals with whom you are communicating may not be located in the country they identify.  You also should not automatically trust official-looking government documents you may have received from them.  Fraudsters will go to great lengths to make you believe you are engaging in a legitimate business and/or procurement transaction.  Do your due diligence before sending any money.

The Commercial Section of the U.S. Embassy in Ghana strongly advises U.S. companies to conduct due diligence on all potential new business partners in Ghana and other markets.  We can assist with this by reviewing correspondence or documentation received from business contacts and/or via one of our due diligence services such as the International Company Profile (ICP), which provides an in-depth or basic background check information on a specific foreign company to help determine its suitability as a business partner.  For more information, contact: Office.Accra@trade.gov or Tel: +233(0)30-274-1870 to inquire about our due diligence services.  You can learn more about services available to U.S. companies on our website: www.trade.gov/ghana.

U.S. entities or business interests with a commercially available product/service produced in the United States can also connect with a U.S. Commercial Service trade specialist located in more than 100 U.S.-based offices.
These fraud schemes can be sophisticated and innovative. Victims are enticed into believing they have been singled out to share in a particular procurement or lucrative business venture.  Other U.S. companies are simply approached online by fraudulent buyers of their products who have studied the U.S company’s website closely, only to be led down a never-ending path of fees to facilitate that purchase.

Advanced Fee Fraud Scheme

The most common scheme is the Advanced Fee Fraud Scheme. The following are common red flags to look for in terms of fraud and scams:

•    Unsolicited offers to buy goods and services or participate in government tenders.
•    In almost every case, there is a sense of urgency.
•    The victim may be encouraged to travel to Ghana or a nearby country.
•    There may be forged, yet official looking documents or passport bio pages.
•    You are asked to register your company abroad in order to conduct business;
•    Most of the correspondence is handled by email, mail, or fax.
•    Blank letterheads and invoices may be requested from the victim along with the banking information.
•    Any number of fees are requested for processing the transaction with each fee purported to be the last required.
•    The confidential nature of the transaction is emphasized.
•    There are usually claims of strong ties to local government officials.
•    A Ghanaian residing in the United States, London, or another foreign venue may claim to be a clearinghouse bank for the Central Bank of Ghana.
•    Offices in legitimate government buildings or banks may be used by impostors posing as the real occupants or officials.
•    In one instance, an alleged “procurement agent” approached U.S. companies at a trade show in the United States to initiate an advanced fee scam.

The most common forms of these fraudulent business proposals fall into seven main categories:

•    Procurement fraud
•    Miscellaneous legal fees to facilitate a business transaction
•    Contract fraud (Cash on Delivery (COD) of goods or services)
•    Disbursement of money from wills
•    Purchase of real estate
•    Purchase or sale of or payment in gold
•    Conversion of hard currency
•    Transfer of funds from over invoiced contracts
•    Advance fees or ‘gifts’ requested to enable U.S. company to be awarded lucrative tender
•    Advance fees to finalize an offer of employment

Recurring Scams

Some of the recurring scams purporting to originate in Ghana claim to be affiliated with the following (fake) organizations. Please note that all of these organizations maintain elaborate fake websites as part of the scammers’ strategy to lure U.S. companies in and persuade them that they are legitimate.

Fake entities with fake websites:

• The African Rescue Supply Project
• National Project Implementation Commission
• National Integrated Project Authority (NIPA)
• National Integrated Development Authority
• West Africa Projects and Development Board
• West African Regional Development Union
• Ghana Private Sector Development Alliance
• Organizations purporting to be affiliated with the African Union and or Economic Community of West African States (ECOWAS), such as:
  • Eco Procurements Authority (ECOPPA)
  • ECOWAS Project Commission
  • Africa Union Trade and Industrial Development Agency

By contrast, legitimate tenders and requests for the supply of goods from the Ghanaian Government are posted in official newspapers and/or on the Ghana Public Procurement Authority (PPA) website.
Gold: Be extremely cautions of any transaction related to the purchase, sale, trade or transportation of gold.  Scammers will often forge these documents.

Letter of Credit and Trade Finance Schemes

The U.S. Export Import Bank (EXIM) has created an informative video that explains common signs of fraud on export documents(applications, financial statements, invoices, bills of lading, export and customs certifications, and letters of credit).  EXIM counsels companies to be on the lookout for: expired, altered or inconsistent documents; unclear fees or commissions; odd prices on invoices; and unverified suppliers or third parties, among other red flags.

Summary

In conclusion, procurement scams in Ghana and West Africa pose a serious risk to international businesses. By recognizing the red flags and taking precautionary measures, companies can avoid falling victim to these fraudulent schemes. Awareness and due diligence are key to preventing financial losses and protecting business integrity.