What Is Advance Fee Fraud?

Advance fee fraud is a category of financial fraud in which victims are persuaded to pay money upfront (the "advance fee") in anticipation of receiving a much larger benefit — such as an investment return, loan, contract, or inheritance — that never materialises. The advance fee is the actual objective of the scheme; the promised benefit is the inducement. [Source: Action Fraud UK, FCA, FBI IC3]

How It Works in the Investment Context

In the investment context, advance fee fraud typically follows a pattern: (1) The victim is approached with a seemingly legitimate investment opportunity, often involving large sums and institutional-sounding entities. (2) The victim is asked to pay "due diligence fees," "cost contributions," "commitment fees," or similar charges before the investment can proceed. (3) These fees are described as necessary expenses that will be returned if the transaction does not complete. (4) After payment, the transaction encounters repeated delays, with excuses provided for why funding has not occurred. (5) Additional fees may be requested. (6) Ultimately, no investment is made, no return of fees occurs, and the operators may dissolve the entities and re-emerge under new names. [Source: FCA ScamSmart guidance, Action Fraud]

Red Flags Identified by Regulators

The FCA, FINMA, and other financial regulators identify several common red flags: upfront fees before any service is provided; entities not registered with relevant financial regulators; pressure to act quickly; promises of guaranteed returns; complex corporate structures designed to obscure beneficial ownership; and registered office addresses at serviced offices shared with many other companies. [Source: FCA, FINMA, Action Fraud]

Pattern Described by Corinth Group Complainants

Multiple independent complainants describe a pattern consistent with the advance fee fraud model in connection with Corinth Group entities. Complainants on Ripoff Report, Diebewertung.de, and other platforms describe: advance fees collected under term sheets and cost contribution agreements; promises of fee return if the transaction did not complete; attentive communication before payment, followed by delays and excuses after; identical explanations provided to different complainants for transaction delays; and ultimately no funded transaction and no return of fees. These are attributed third-party statements. [Source: Ripoff Report #1134964, Ripoff Report #1344693, Diebewertung.de]

Reporting

If you believe you have been a victim of advance fee fraud, you should report to: Action Fraud (UK), FINMA (Switzerland), CySEC (Cyprus), your local police fraud unit, and the relevant financial regulator in your jurisdiction. Many of these reports can be filed for free.

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