Branson wrote about how he was nearly duped in the elaborate scam six months ago on his Virgin blog - the first of two scams which involved him.
He was recently involved, much to his surprise, in a friend losing out on $2 million. He believes the two scams are linked.
The 67-year-old explained how he was contacted six months ago by Mr Fallon via a note on official government paper. Or so he thought.
The Virgin boss contacted the number on the note after he was urged to do so and who he thought was Mr Fallon explained the complexity of the situation as a British diplomat had been kidnapped.
He was told how British laws stopped any ransom payouts and that Branson would receive the money he contributed back.
“I called Sir Michael on the number given,” Branson wrote. “He told me it was an incredibly sensitive matter and that he wanted to be sure there was nobody else in the room whilst I talked to him. He asked that we speak in strict confidence and said that a British diplomat had been kidnapped and was being held by terrorists.
“He told me that British laws prevented the government from paying out ransoms, which he normally completely concurred with. But he said on this occasion there was a particular, very sensitive, reason why they had to get this diplomat back. So they were extremely confidentially asking a syndicate of British businesspersons to step in. I was asked to contribute $5 million dollars of the ransom money, which he assured me the British government would find a way of paying back.”
At this point the business magnate was sceptical request, coming on the back of hearing about other incidents where people had been the target of scams.
“I needed to be absolutely certain that this wasn’t such an event, and that he was who he said he was,” Branson explained. “He said he fully understood and that I should send one of my senior team over to his department at Whitehall to have a quiet word with his secretary. He said that she was the only other person who knew about it and that if we said the code word ‘Davenport’, she would affirm it was for real.
“Although the Sir Michael I spoke to sounded exactly like Sir Michael, I was understandably cautious. After I had asked one of my lawyers to go to Whitehall, I rang Downing Street and asked to be put through to Sir Michael’s office. His secretary assured me that Sir Michael hadn’t spoken to me and that nobody had been kidnapped. It was clearly a scam. I told them what had happened and we passed the matter over to the police.”
Recently Branson found out he had unwittingly been part of another scam in which a friend from US had been duped out of $2 million.
The person had been persuaded by a Branson impersonator on the phone to part with the cash to help “mobilise aid” following Hurricane Irma in the British Virgin Islands
Branson wrote: “A very successful businessperson, they asked me when I would be returning the three week loan I had asked for to help the BVI communities. I had no idea what they were talking about.
“They claimed I couldn’t get hold of my bank in the UK because I didn’t have any communications going to Europe and I’d only just managed to make a satellite call to the businessman in America. The business person, incredibly graciously, gave $2 million, which promptly disappeared.
“I spoke to the business person and had to tell him specific details of our last get-together before he was convinced it was really me and not the conman. We quickly realised he had been duped out of his money by a criminal pretending to be me. He has spent his life being cautious and told me he couldn’t believe how stupid he had been. He is an incredibly generous person who gives to all sorts of causes, and it is just too sad for words that of all people it was he who had fallen for it.”
Branson warned about the rise of fake ad scams online and urged everyone to remain vigilant.