Fake financial documents
ICC’s Commercial Crime Services announced the recent closure of an online banking fraud involving fake documents worth US $3.9 billion.
CCS Commercial Crime Bureau (CCB), which carried out investigations that reported fraud feasors had published fake banking guarantees on many websites to lure potential victims to invest in projects and finance schemes.
The web addresses gave the impression that the scam sites were run by either Euroclear Bank, the international clearing system for the settlement of transactions in securities and Eurobonds, or Bloomberg, the information services provider. Examples of these domain names are http://www.euroclear30.50megs.com/ and http://www.bloomberg.50megs.com/ .
Advance fees of hundreds of thousands of dollars were paid for the issue of these fraudulent guarantees, and the websites were used to validate the documents. The amounts represented on the fraudulent sites ranged from 50 million to over 400 million dollars.
In addition to being used to procure advance fees these guarantees were to be used in bogus High Yield Investment Programs (HYIP) that promised high returns from low risk financial instrument trading.
The bank guarantees were confirmed to be fraudulent, and Euroclear Bank and Bloomberg were alerted to the intellectual property breaches. The big risk is that these frauds could rock the trust that the banking, finance, and insurance industries are built on.
This method of fraud has been run by many, on several occasions. The international Monetary Fund (IMF) and the US Securities Commission (SEC), the Federal Reserve Banks (FED) and Offices of the Comptroller of the Currency (OCC) have all published issued warnings.
A Certificate of Deposit (CD), is a receipt issued by a bank for the deposit of a sum of money. Forged CDs have been used as bait for high yield investment schemes by con artists.
The following is a checklist to help identify whether or not Certificates of Deposit are genuine:
• High interest rate
Check that the interest rate is stated on the certificate itself and not just in the accompanying documentation. The rate of interest in genuine documents is usually around base rate. If higher rates are stated, check for further explanation of how the trading of the certificate will generate the higher yield.
• Uneven time period
Time periods should be stated in clear periods such as “one year”. The addition of an extra day, week or month is characteristic of many fictitious transactions.
Red flag phrases, including:
• “funds of non-criminal origin”
… No bank would use this phrase because it could not validate such a statement.
• “the funds are blocked”
As far back as March 1995, the Comptroller of the Currency, Administrator of National Banks in the United States issued a warning on the use of this phrase. It is not known to exist in the legitimate banking community.
• ‘KTT’ payment mode
This phrase is favored by fraudsters. It refers to an encryption test of the Telex Machine Key Tested Telex or KTT, not a payment method.
• UCP 500
Fake documents often refer to erroneous international standards or rules. A common example is UCP 400 which has now been superseded by UCP 500.
• Mistakes in these documents are often intentional. Fraudsters may also drop in legitimate-sounding phrases to establish whether the targeted person knows what they’re talking about.” It is a way of assessing their mark for the fraud.