I have been approached by a foreigner to wire a substantial amount of money into a account of my choosing for a fee. I see these all the time. Is it illegal to receive foreign money? Can I protect myself from fraud by opening a specific type of account and are these transactions taxable if they come from a foreigner?

You've already been duped by a fraudster... you have actually believed they are legitimate.

If you proceed with this... there is no possible way to protect yourself.

Think about it... would YOU deposite a large sum of YOUR money into someone else's account you really don't know OVERSEAS that would have full access to it? No... and neither would any other thinking person.

Don't let your greed push your common sense aside.