Families in Bradford are being duped into handing over birth certificates which are then used to obtain illegal passports.
The elaborate scam is thought to be aimed at enabling illegal immigrants or asylum seekers to apply for passports or other official documentation.
Police have launched a full-scale inquiry into the letters being sent by a bogus Council official, appealing for the birth certificates to be sent to a city centre address.
But the property, 39 Cheapside, houses just an empty shop and two floors of social services offices.
The letter - printed on notepaper bearing the city's coat of arms - claims files on family members have been lost due to computer error.
They are told that photocopies of the certificates are not acceptable and they must send the original documents, which will be returned within a week.
The letter adds: "In order to avoid prosecution and legal proceedings, please send the birth certificates as soon as possible, preferably during this week, as this will ensure a quick response and your birth certificate will be returned to you within one week."
It is signed by "Steven Charter, principle personnel officer" but the Council's chief executive Ian Stewart, said today: "No such person is employed by the Council, and these letters didn't come from us. They are nothing to do with the Council.
"We want to alert people to the fact that they are fakes and they should under no circumstances respond to them or send their birth certificates.
"We believe they are targeted at Asian people, who may be frightened of officialdom, or people who may not properly understand them. Someone must have access to the mail box."
It is feared they could be used by criminals to seek legitimate identities for illegal immigrants and asylum seekers.
"They could be used to obtain passports, or Government documents, for identification," he said.
"This is a very serious matter and we have passed these letters on to the police. There could be a large number or a few - we just don't know. They do not appear to be targeted at any particular area."
The false correspondence has come to light just days after it emerged that the signature of a Bradford MP had been forged in a bid to get visas for five people wanting to visit Bradford from Pakistan.
As revealed by the Telegraph & Argus, a letter bearing the forged signature of Bradford North MP Terry Rooney, was sent to the British High Commission in Islamabad, supporting the visa applications.
Commission officials spotted discrepancies in the signature and contacted Mr Rooney, who confirmed it was not his signature.
Mr Rooney sent the letters to Council leader Councillor Margaret Eaton, who passed them onto Mr Stewart.
Police are now investigating the forged letters after Mr Stewart handed them on to senior officers.
Mr Stewart said today that anyone receiving the fake letters asking for birth certificates should contact the Council or police.
A West Yorkshire Police spokesman said: "We are investigating the letters and looking for whoever sent them."
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