Tom Ericson, a retired bank employee who lives in Denmark, still can't get over how he lost about Euro 60,000 (US$90,000) in a bogus lottery.

Ericson (not his real name) now knows there's no such thing as a "Microsoft Lottery," and that the e-mail he responded to is just one of millions sent every day by scammers perpetrating advanced fee frauds, where victims are duped into sending money in exchange for a service or prize that never arrives.

Ericson thought he had won £500,000 (US$1 million). "I've been cheated the tough way," he said during an interview for a video distributed internally within Microsoft. "I'm only telling this because I hope nobody goes through the same thing."

Advanced fee fraud, also known as "419" scams after how the crime is classified in Nigeria's criminal code, are nothing new. The scams are still carried out through regular mail, but e-mail is now the powerful distribution method of choice.

Ultrascan Advanced Global Investigations in the Netherlands, which has a special department dedicated to 419 crimes, estimates conservatively that US$4.3 billion was lost worldwide to 419 scams in 2007. Countries most victimized are the US, UK and Japan. Ultrascan's data comes from its own investigations, and it advises that the real figure is likely many times higher.

Ericson's case has probably received more attention from law enforcement than most since he notified Danish police, who have been investigating for more than six months. Most victims never report their losses due to embarrassment.

Microsoft also stepped forward to help since the scammers used the company's brand name -- a common tactic -- in the ruse. Other companies are also irked by the surge in 419 crime. In May, Yahoo filed a federal lawsuit against 50 unnamed individuals and companies for using its trademarks for lottery-related scams.

Microsoft has seen a 300 per cent increase year-over-year in complaints, said Jean-Christophe Le Toquin, a Microsoft attorney based in Paris.

The schemes are most successful against trustworthy people who tend to develop complex relationships with the criminals.

"The reality we see is that these victims get themselves in real trouble not only financially but also from a psychological perspective," Le Toquin said. "The more money they give, the more they want to believe in the scammer."

The belief is naive, but the scams have been successful against even some of the brightest minds. Frank Engelsman, a 419 expert with Ultrascan, said he's dealt with two cases where Nobel Prize recipients were taken in by sophisticated schemes.

One of the Nobel winners became wrapped up in a plot that involved supplying vaccines to a country, Engelsman said. The other lost close to US$4 million in a gold-related scheme, he said.

In Ericson's case, it seems the perpetrators were connected with Nigeria, but operating out of London. In order to collect his lotto winnings, Ericson was told to send thousands of British pounds in legal and courier fees over eight months.