The woman, 75, who asked not to be named, received a letter in March from the conmen claiming to be from a bank in Hong Kong.
They said they had a £10m inheritance payout waiting for her, but in order to release the money, she needed to transfer funds to a separate account.
The pensioner eventually handed over £400,000 of her life savings, investments and the inheritance from the death of her husband.
In the following months she received more letters, faxes and phone calls from people pretending to be solicitors and bank managers, asking her to send more money to cover fictitious administration and tax costs.
At each stage, the woman from Darlington, County Durham, was assured one final payment was all that was needed to release the money.
But by the time police were alerted she had been conned out of her entire life savings. Detective Constable Vikki Cooper said last night: ‘She is embarrassed and upset, but hopes this will act as a warning for other people.
‘We are making inquiries through our economic crime unit but, sadly, as this fraud originated overseas and had already taken place over several months before the police became involved, there is little realistic prospect of the money being recovered.
‘People should on no account hand over any money or personal details if they receive a letter of this sort.
She said: ‘Someone pretending they were from the police rang my mother on Monday to say she had fraudulently used somebody’s card and would be picked up and taken to court in London if she did not pay them £250.
‘She was absolutely petrified. She rang me up in tears asking to borrow the money and couldn’t sleep the night before she was supposedly going to court.’
Susan Carter, of Age UK Darlington, said: ‘These people are so plausible, they are often nicely spoken and polite, so it is very easy to be taken in by what they are saying.
‘Do not enter into conversations with these people. Put the phone down, do not talk to them and do not under any circumstances hand over bank details.’
Darlington Borough Council is reminding resident to be on the look out for the warning signs.
They include unsolicited messages asking for personal or banking details, or people asking for money up front to release a larger sum of cash. Bad grammar and an odd use of language are also giveaways.