"Advance Fee Fraud" Schemes

Advance fee fraud gets its name from the fact that an investor is asked to pay a fee up front or in advance of receiving any proceeds, money, stock or warrants in order for the deal to go through.  The fee may be in the form of a commission, regulatory fee or tax, or some other incidental expense. These secondary "advance fee" schemes work very similarly to boiler room operations, the difference being that an advance fee scheme generally targets investors who already purchased underperforming securities, perhaps through an affiliated boiler room, offering to arrange a lucrative sale of those securities, but first requiring the payment of an “advance fee.”

Characteristic of some advance fee fraud solicitations and other fraudulent schemes to deceive and defraud unwary investors is the use of websites and e-mail addresses ending in “.us” or “.org” and containing “.gov” as part of the domain address. We are not aware of any U.S. government agency that has a website or e-mail address that ENDS in anything other than “.gov”, “.mil”, or “fed.us”. Accordingly, investors should beware any website or correspondence purporting to be from a U.S. government agency bearing an e-mail address that does not end in “.gov”, “.mil”, or “fed.us”.

For more information about advance fee schemes and boiler rooms, please see the following:

http://www.sec.gov/answers/advancefeefraud.htm