419 Email Scams

Introduction

A 419 fraud scam works in innumerable ways with very similar stories to defraud generous and sometimes greedy consumers. We are going to explore the most common methods used and some ways you can fight back. They are also called Nigerian scams, and there are a few variations to them.

1. The Orphaned 'Princess'

So the story goes, there is a King, an Ambassador or some other person of high official capacity in a country few have heard of who has been murdered along with his wife. Only this poor soul of a child, now full grown remains. As sole heir to her father's fortune of several millions she searches for the right person (usually whoever it is that answers the email she sends) to rescue her from her fate. She is in a refugee camp treated as a prisoner and only a faithful, lonely American (or a person from whichever nation she was emailing) can help.
She wishes to transfer those millions into your bank account and will give you from 10% up to 50% if you will merely forward enough money for her to get out of the camp. Here, the variations split into two, either she is going to electronically transfer these funds into your account, or she will send a cashiers' check for you to deposit and send the other percentage to her so she can get out of the camp.
If you do share your account information with her, your account will be drained before the end of business day. If you take the cashiers' check to deposit, it takes a total of 3 or 4 days to learn that it's a fake and if you have sent her a percentage before the cashier check cashes, you are out that amount of money. She can be in Senegal, Nigeria, China, or the Phillipines.

2. The Lonely Foreign Fiance -

This is almost the same scam except that she may or may not be from a wealthy family whose father was murdered. She is just looking for a ticket to a better country and she will fall in love with and marry whoever answers the email. Then you get hit up with requests for passport fees, travel fees, a relative who is sick or injured. They troll singles dating sites, personal classifieds and business classifieds. Your ad may be for business services, and yet from that ad, they are able to determine that you are their soul-mate and you are destined to fall in love and marry. She will send pictures of a very young and beautiful woman, which may or may not be her in reality. Many of these are from Africa or the Phillipines, and a number of them are Russian or Ukranian women looking for American men to marry. Once you have sent well into the thousands of dollars to get your exotic bride, you never hear from her again.

3. Foreign Lottery Winner -

You get an email that you have won a lottery in a country you've never been in, much less bought a lottery ticket in. In order to claim it, you will need to pay the 'tax' on the foreign winnings. If you send a check, kiss it goodbye. If they request bank information to deposit the winnings into, kiss your balance goodbye quickly.

Regardless of which scam you are seeing, either they want your payment information or they are sending you a worthless check you have to cash quickly to send them the tax, or whatever they request. The bank then charges you the amount of money you transferred to them and you are stuck with less in your account than you had before.

What to Do About It

Any email promising money, love, or something good to you from another country is a scam. That is rule one. Any email requesting bank information, paypal information, or any other personal information is a scam. No bank will ever request this from you through email, they already know your information.

If you have received one of these emails forward it to 419@419scam.org (and this is important) forward it as an inline text, not as an attachment. They use the source code to track down the source of these emails and can send this to the appropriate authorities in the appropriate areas.

Play with them a Bit.

I like to play with these people. I tell them a heart wrenching story about my wife passing away and my children very disturbed and sad. (none of which is true) And they write back with fervor! Thinking to themselves that they have a hurting soul who will be only too glad to send money for companionship, or take them up on collecting from the "orphan's" bank account.

See what information you can gather by sending a reply, "Yes Dear, I've been looking for Love too" or, "I Won! Wow I sure could use the money." etc. See if they send a phone number or address to send money to so that you can forward that information too. The authorities will use this information to take the appropriate actions. The scam artists can then no longer use that mailbox or that email account and have to make changes. Forward each of their replies to the 419 scam site and do your part to shut down these rip off artists! You could be responsible for sending them to prison.

Things to Look For.

Common phrases used include:
"I am concerned for your health, there."
Remain with my lots of love and hug of kiss
Good Morning Darling. How are you doing today, I know that you are in good condition of health.

Often there will be misspellings and terrible English grammar, not unexpected in emails from someone whose first language is not English. There will be pressure, a deadline that needs to be met that requires immediate action.

Conclusion

There are those who are out there whose only way to make a living is to scam money from you. And if they will lie, cheat and steal from a widower with children and a sob story, they will lie, cheat and steal from you, too. Remember, if it sounds too good to be true, then it IS.

Depreciation or Section 179:

Which is Best For Me?

by David Roberts

Introduction

This is not an article that will satisfy a CPA's level of knowledge about the issue of Section 179 and depreciation, this is an article that will over simplify the concepts for a business owner who has no interest in pursuing an accounting degree or accounting knowledge in any way, shape, or form. There are those that will say that the illustration I will use here is crude, to those who say that, I say, thank you. And since this is an article for the average business owner, I am not going to discuss limitations, minimums or any of the information that is preprinted on the tax forms, that's for their tax preparer to explain later.

Depreciation

Depreciation is the eventual reducing of the value of a fixed asset over a set number of years based on the type of fixed asset it is. The great powers that be at the IRS have determined the useful life of all possible fixed asset types and unfortunately we have no say in that matter whatsoever. For computers we get three years of useful life, vehicles we get five, perhaps seven if it's considered an equipment vehicle, 27.5 years for buildings (there's actually a funny story about how they settled on such a weird number for buildings, but only CPA's laugh at it so we'll just skip it.)

Using a computer as our example we have 3 years of useful life of that computer. So our $2000 Dell will decline in value over that three year period based on its cost and how much it will be worth in three years. Let's assume that the computer will be worth $0, as they are generally outdated three months after purchase anyway. So over the next 3 years we are reducing the value of that computer by $667.00/year. At the end of the third year, our computer's value is now at $0, but it's still working as efficiently as it did from day one.

We have the option of keeping it in working condition until it dies, OR what a lot of companies will do is donate the computer to a non profit organization and deduct the estimated value of that computer as a charitable deduction, then buy a new one and start the process all over again. Get it?

Section 179

Let's face it, accountants love any form or phrase that begins with the word, 'section' and has a number in it. CPA's love to Section 179 fixed assets, I know, accountants really need a hobby. Stay with me here. If we imagine that same computer's time of useful life as a pie cut into three pieces, using depreciation, we take a piece of that pie each year. Using Section 179, we take all three pieces the first year of owning the asset (or putting it into use).

Now why wouldn't we want to just write off the whole thing with a Section 179? The little addressed subject of Unrecaptured Gains. In other words, if we take all three years at once we must keep that object for all three of those years to avoid paying taxes on the depreciation we took in the first year.

The Analogy

Okay here it comes. Take this pie that represents the useful life of a fixed asset and Section 179 it (eat all three pieces now). That means that you cannot dispose of it in less than three years, so that means, that's right you are going to have to refrain from using the restroom for three years, because you can't dispose of that asset during it's useful life! And if you do decide that you must dispose of the asset, let's say on the 18th month that you have owned it, you are going to have to (cough up) the remaining 18 months of depreciation you have and give it to the IRS.

Conclusion

The good news is that Section 179 is a good plan for businesses that need more of a deduction in the first year and that big ticket items are rarely sold before their useful life is over. You just need to understand, as a business owner, what it means to you to choose this option. And hopefully, you haven't been too offended by the analogy.