Banking
instrument scam is peddled on Internet
Paris, 7
May 1998 - The International
Chamber of Commerce issued a warning to investors against an alleged trading
programme based on fraudulent instruments and falsely quoting its name and rules.
It said the scam, which is being promoted over the Internet, has already fleeced
investors of tens of millions of dollars.
ICC’s London-based Commercial Crime Bureau
reports that investors are being asked to put their money into a spurious "Bank
Debenture Trading Programme". The sales pitch describes it as "an
investment vehicle, commonly used by the very wealthy, where the principal investment
is fully secured by a Bank Endorsed Guarantee."
Documentation claims
that the investment involves
the purchase and sale of fully negotiable bank instruments that purport to be
a debt obligation of the top 100 world banks in the form of 'Medium Term Notes
(MTN)', 'Standby Letters of Credit' or 'Bank Guarantees'.
Potential investors are told that a few people
would qualify for these investment opportunities, which were 'by invitation
only'. All transactions are said to be kept strictly confidential by all parties
and for this reason no client references would be available.
Eric Ellen, Executive Director of ICC Commercial
Crime Services, said: "These instruments are falsely said to conform in
all aspects with the Uniform Customs and Practice for Documentary Credits as
published by the International Chamber of Commerce." Reference is made
to ICC Publication 500, the current version of the documentary credit rules
that came into force in 1994.
Mr Ellen added: "ICC Commercial Crime Bureau
warns investors against these fraudulent programmes. The 'Bank Debenture Trading
Programme' described in the documentation does not exist and has claimed tens
of millions of dollars from victims worldwide."
ICC has long campaigned against scams based on
phony banking instruments. In 1996, ICC Commercial Crime Bureau published its
second special report Prime Bank Instrument Fraud II – the Fraud of
the Century which details fraudulent techniques and lists danger signals
investors should watch out for it they want to stay out of trouble.