How an online Nigerian letter scam led to a Central NY man’s murder

Editor’s note: This article originally published in The Post-Standard on Oct. 3, 2004.
Van Buren, N.Y. —It’s been a common scam for 20 years, but Daniel Herbert apparently fell for it and died as a result.
Herbert bought into a so-called Nigerian letter scheme seven years ago, according to state police investigators. He believed he was in line for $5 million from a $25 million overseas account that “international merchants” told him would be freed up as long as he kept sending money, according to police reports.
Five years later, Herbert was beaten, stabbed and shot to death in his Van Buren home at the direction of a woman who’d rounded up investors and paid him as much as $400,000 to help get access to the money.
But like similar scams, there was never any money, and the investors never got a penny back from Herbert, according to state police.
“It appeared to us that he himself was a victim of it, whether he knew it or not,” said state police Investigator Michael Grande.
Two weeks ago, Susan “Bobbi” Cobaugh pleaded guilty to paying a man $20,000 to kill Herbert on Dec. 6, 2002. Through her company, Advanced Healthcare Inc., she’d taken out an insurance policy worth $7.5 million on Herbert’s life, according to a police report.
She admitted her guilt after the man she hired, John Gradia, provided prosecutors with secretly tape-recorded conversations between Cobaugh and him in which she implicated herself. Gradia’s lawyer, George Hildebrandt, refused to comment. Cobaugh’s lawyers, Randi Bianco and Thomas Ryan, could not be reached.
The plot thickens
Herbert borrowed money from his family and friends, and got associates to recommend him as a financial wizard with good credentials.
Larry Edinger was one of the victims.
Edinger, 55, of Latham, gave Herbert $14,000 in 1997 as a fee for a $140,000 loan that Herbert said his company, Factor Management International Inc., would give Edinger within three days. Edinger needed the money to buy equipment and make payroll for his growing janitorial business. He admits it seemed odd to have to pay a fee to get a loan, but said that at the time he was desperate.
Over the next five years, Edinger paid another $16,000 to Herbert in increments. Herbert would tell him and other investors that he was close to getting the $25 million freed up, that all he needed was another $5,000, Edinger said.
Herbert, 55, traveled to Benin, South Africa, and to Paris to try to close the deal, Edinger said. Edinger and Cobaugh would wire money to Herbert to pay for his hotels or other expenses overseas, Edinger said.
“I remember him calling and saying he was fearing for his life,” said Edinger, who has receipts for the wire transfers to South Africa in 1999 and 2000, and to Paris for two months in 2000. “He said, “I need money, Larry. I need money to get out of here. I have a satchel of money that I have to get to Paris.”’
Herbert claimed he’d been shown a big pile of cash when he was in South Africa, according to police reports.
Victims of Nigerian scams sometimes get so caught up in them that they go overseas to track down their money, said Senior Investigator William Moshier with the state police’s financial crimes unit. Some victims are then kidnapped and their families receive ransom demands, he said.
“They’ve gone as far as drawing people to travel to Nigeria because these people have dollar signs in their eyes,” Moshier said.
Herbert’s wife, Martina Herbert, told police he believed for years that the money would be his any day.
Herbert “was obsessed with the deal he was working on and could not let it go,” the report said, quoting Martina Herbert. “He was fully convinced that a large payout was a short time away.”
She asked him if he thought he was the victim of a scam, and if his investors would blame him, the police report said.
“He responded that they would blame the corporation and not him,” the state police report said. “She stated that (her husband) was convinced that the deal would be completed and could not let it go.” After Herbert’s murder, his wife moved back to her native Ireland with their son.
“God, this will help”
Edinger was sending his money to a bank in England, he said. Cobaugh was sending hers, which she’d collected for two investors, to a bank in Canada, Edinger said. One of her investors sent $225,000 to a bank in Nigeria. All of them did so at Herbert’s request, Edinger said.
Cobaugh, 38, of Washington, D.C., tracked down Edinger in 1998 after she suspected her investment with Herbert might never be returned, Edinger said. She and Edinger spoke as often as 10 times a day almost every day over the next four years, he said.
Cobaugh used to drive up to Central New York, park outside Herbert’s home in Van Buren and wait for him to get home because he wasn’t returning her calls, Edinger said. She used to call Edinger while she waited, he said.
“She used to stalk Dan,” Edinger said. “She’d go right up to him and say, “I want my money. I’m sick of your lies.”’
Edinger was forced into bankruptcy because Herbert never repaid him. At least one other investor also went bankrupt, according to police reports. Edinger had to dissolve the janitorial business he owned. He says he now works three jobs to stay afloat: as an accountant, a chef and a banquet coordinator in Albany.
At one point, long after Edinger and Cobaugh had invested their money, Herbert told them the investments were going toward an oil deal he was working, Edinger said.
He acknowledges he should’ve realized Herbert’s offer sounded too good to be true. But Edinger said he didn’t know until after Herbert’s death that the investments were for a Nigerian scam.
“There was a little bit of a red flag in my mind at the time,” Edinger said. “But I had too much to worry about. I had a lot of people working for me. All I could think was, “God, this will help. I can make payroll.”’
“Not to worry’
Paul Bertan, a chemistry professor at Onondaga Community College, gave $20,000 to an associate of Herbert’s, Edmond Roelen, who told him that Herbert would be getting $25 million, according to police reports.
“Herbert said he had a $25 million trust fund that he put together in Saudi Arabia,” said Bertan, who gave Herbert $1,400 but invested $20,000 with Roelen. “But for various reasons, he could not get the money out of the fund without putting up a lot of front money.”
Herbert told the investors he’d be getting $5 million back, Bertan said. Roelen told Bertan that his investment would yield $250,000 from Herbert, which Roelen planned to use to build a tire grinding plant.
Roelen, of Syracuse, said he believes Herbert’s deal was real.
“Everyone else says it was a scam,” Roelen said. “But I knew Dan. He wanted to go in business with me. I don’t expect to get paid back unless I do something about it, like physically go over there.” Roelen cut the interview off and would not answer any more questions.
In 1998, Herbert and Roelen paid $8,000 to a financial consultant in Houston to investigate “some deal pertaining to a box of money in the Ivory Coast,” according to a state police report. A business evaluator looked into the deal “and found out it was a scam,” the report said.
Edinger tried to get local, state and federal law enforcement agencies to investigate Herbert before his death, but says that none did.
He said he didn’t know that Cobaugh had taken out an insurance policy on Herbert’s life. That may have been why she used to discourage him from trying to get the police involved, Edinger said.
Edinger recalls Herbert repeatedly milking him and Cobaugh with claims that he needed more money because of another snag overseas.
“He’d say, “Not to worry, Larry,”’ Edinger said. “That was his favorite line to everybody. “Not to worry. Everything’s coming through on this.”’
Nigerian letter scam had a long history
The infamous Nigerian letter scam has been kicking around for two decades. Here’s one version of it:
Someone pretending to be a Nigerian businessman sends a letter, fax or e-mail to millions of Americans, asking for help getting a large sum of money out of Nigeria – sometimes as much as $40 million.
Because he’s being persecuted under a new government, he’s trying to get his hard-earned money out of the country before the new dictator steals it.
He’s looking for someone in the United States to help by providing a bank account to transfer the money to so he can come to the United States and get the money. For the American’s efforts, the businessman will pay up to one-third of the $40 million.
“You’re talking millions of dollars – basically winning the lottery,” said Senior Investigator William Moshier with the state police’s financial crimes unit. “They’re playing on people’s greed.”
Then the businessman suddenly says he needs $5,000 to pay a tax or to bribe a corrupt government official to free up the money. If the American sends that money, the businessman makes up another problem that requires another payment.
The scam used to be done by mail; there were so many letters going out in the 1980s that the scammers started making counterfeit postage stamps in Nigeria to cut down on their overhead, Moshier said.
The scams, now done through e-mails, usually use other foreign countries in the ploy. They don’t mention Nigeria anymore because that name has become so connected to the scam, Moshier said.
Nigerian scam: A timeline
1997 through 1999: Daniel Herbert of Van Buren gets people to invest money with him through his company, Factor International Management Inc., by promising them large loans if they fronted him 10 percent of the loan amount. He gets at least five investors to give him at least $630,000. His sister and brother-in-law give him $34,000. A man from Columbus, Ohio, gives him at least $25,000. A Provo, Utah, man gives him $33,000. Larry Edinger of Latham gives him $14,000. A Syracuse man gives him at least $25,000. Susan “Bobbi” Cobaugh of Washington, D.C., gives him about $500,000 that she got from investors in the company she was planning to start that would provide beds for nursing homes. None of the investors get repaid any amount of money.
September 1999: Herbert travels to Benin, South Africa, and tells people he’s planning to close the deal on releasing $25 million that will result in a $5 million payment to him. He calls Edinger and Cobaugh at least three times asking them to wire him money for living expenses. Edinger has Western Union receipts showing he wired Herbert three times for a total of $1,200.
2000: Herbert tells Edinger and Cobaugh for the first time that the fees they paid him to get loans was actually an investment, and that they’d have to wait for the payoff.
February 2000: Herbert again travels to South Africa to “complete the deal,” and later tells his wife and others he was shown a large pile of cash. But he returns home with no money.
April 2000: Herbert goes to Paris for two or three months, again to close the deal. He calls Edinger and Cobaugh at least three times, asking them to wire him money to pay for his hotel and other expenses.
2001: Herbert’s wife, Marilyn, threatens to leave him unless he starts earning money. He insists that his deal will come through.
September 2002: Cobaugh confronts Herbert when he’s at North Medical Center in Clay, where he’s being treated for high blood pressure. She demands her money.
Dec. 6, 2002: Herbert is shot, stabbed and beaten to death in his home at 762 Village Blvd. S. in Van Buren. Cobaugh calls Edinger and tells him the news. “I said, “What?”’ Edinger said last week. “She says, “Dan is dead. I got to go. I got a meeting.’ ”
Feb. 18, 2004: John Gradia, 34, of Vineland, N.J., is charged with murdering Herbert for $20,000 from Cobaugh.
Feb. 20, 2004: Cobaugh is charged with murder.
Sept. 2, 2004: Gradia agrees to cooperate with Onondaga County prosecutor by testifying against Cobaugh.
Sept. 23, 2004: Cobaugh pleads guilty to murder after Gradia’s lawyer gives prosecutors tape-recorded conversations between Gradia and Cobaugh in which she implicates herself in Herbert’s slaying.
Sept. 29, 2004: Jason Branin, 21, of New Jersey, pleads guilty to criminal conspiracy for acting as the lookout man during Herbert’s slaying.
Source: New York State Police reports.