International fraud artists have
invented an investment scheme that offers extremely high
yields in a relatively short period of time. In this scheme,
they purport to have access to "bank guarantees" which they
can buy at a discount and sell at a premium. By reselling the
"bank guarantees" several times, they claim to be able to
produce exceptional returns on investment. For example, if $10
million worth of "bank guarantees" can be sold at a two
percent profit on ten separate occasions, or "traunches," the
seller would receive a 20 percent profit. Such a scheme is
often referred to as a "roll program." To make their schemes
more enticing, conartists often refer to the "guarantees" as
being issued by the world's "Prime Banks," hence the term
"Prime Bank Guarantees." Other official sounding terms are
also used such as "Prime Bank Notes" and "Prime Bank
Debentures." Legal documents associated with such schemes
often require the victim to enter into nondisclosure and
noncircumvention agreements, offer returns on investment in "a
year and a day", and claim to use forms required by the
International Chamber of Commerce (ICC). In fact, the ICC has
issued a warning to all potential investors that no such
investments exist.
The purpose of these frauds is
generally to encourage the victim to send money to a foreign
bank where it is eventually transferred to an off-shore
account that is in the control of the conartist. From there,
the victim's money is used for the perpetrator's personal
expenses or is laundered in an effort to make it disappear.
While foreign banks use instruments called "bank
guarantees" in the same manner that U.S. banks use letters of
credit to insure payment for goods in international trade,
such bank guarantees are never traded or sold on any kind of
market.
Some Tips to Avoid Prime Bank Note Related Fraud:
-
Think before you invest in anything. Be wary of an
investment in any scheme, referred to as a "roll program,"
that offers unusually high yields by buying and selling
anything issued by "Prime Banks."
-
As with any investment perform due diligence.
Independently verify the identity of the people involved,
the veracity of the deal, and the existence of the security
in which you plan to invest.
- Be
wary of business deals that require nondisclosure or
noncircumvention agreements that are designed to prevent you
from independently verifying information about the
investment.
