Prime Bank Instrument Fraud

Prime Bank Instrument fraud schemes have attracted significant international attention, since individuals and organizations have lost billions of dollars worldwide. "Prime Bank Instrument Fraud" is the general term given to fraud schemes that go by many different names, including:

Prime Bank Debentures
Prime Bank Guarantees
High-Yield Trading or Roll Programs
Standby Letters of Credit
International Chamber of Commerce (ICC) 3039 or 3034 Letters of Credit
Guaranteed Bank Notes
Discounted U.S. Treasury Securities
International Monetary Fund Backed Securities
Common Examples

In these schemes, the fraud artists purport to have access to a secret trading program sanctioned by the Federal Reserve Bank, the Treasury Department, the World Bank, the International Chamber of Commerce, or the International Monetary Fund. Read about a fairly common example of how this fraudulent world is explained to potential investors. The more the explanation given to you resembles this explanation, the more likely you're being offered a fraudulent investment.

Various "prime bank" trading programs or similar trading programs that offer secret, private investment markets, which purport to offer above average market returns with below market risk through the trading of bank instruments are fraudulent.
Offering such programs, or claiming to be able to introduce investors to people who have access to such programs, violates many federal laws including criminal laws.
There are no "secret" markets in which banks trade securities. Representations to the contrary are fraudulent.
Also, investment programs in which a financial institution is asked to write a letter, commonly referred to as a "Blocked Funds Letter," advising that funds are available in the account, "clean, and of non-criminal origin," and free of "liens or encumbrances" for a certain time frame, are frequently used to perpetrate fraud schemes. These letters have no use in legitimate banking circles.

The symbols, names, and products of the U.S. Treasury Department are misused in these schemes in several ways. Some schemes claim that the U.S. Treasury:

Backs or approves such programs
Has a "secret trading room"
Must approve the humanitarian projects connected to these schemes
Has purchased securities for investors to guarantee against loss
Has a way to pool investor funds and buy and sell securities "just like the Rockefellers can."
NONE of these assertions are true.

It is illegal to engage in fraud in the offer or sale of a security. Under most circumstances, it is also illegal to sell securities that have not been registered with the U.S. Securities and Exchange Commission. A security includes the following items: "note," "stock," "bond," and "debenture" and more general terms such as "investment contract" and "any interest or instrument commonly known as a 'security'." Designating such instruments as "loans" does not change their legal status as securities. SEC v. W.J. Howey Co., et. al, 328 U.S. 293 (1946).

Warning Signs

Name dropping
Buzzwords
Excessive secrecy
Over-reliance on authentication
Excessive disclaimers
Unwarranted appearance of professionalism
Big player behind the scenes
Yields are too high
Lack of transactional basis
A secondary market where these investments can be laid off quickly and profitably
Flawed documentation
What to Look For

There are many terms that are commonly seen in documents presented by fraudsters in marketing fraudulent investment schemes. Fraudsters often mimic and misuse legitimate banking terms. Many of the following genuine terms are misused along with those that have no meaning in the real world. They are thrown together in documents that contain a mix of fact and fiction, often confusing to a first-time investor.

Non-circumvention
Non-disclosure
Good, Clean, Clear, and of Non-Criminal Origin
Blocked Funds Investment Program
Prime Bank Trading Program
Federal Reserve Approved
Treasury Approved
Roll Program
Irrevocable Pay Orders
Prime Bank Debentures, Notes, Guarantees, Letters of Credit
Fresh-Cut Paper
High-Yield Investment Program (HYIP)
ICC 3034 or 3039 Letter of Credit
Off Balance Sheet Program
Prime Bank Debenture Trading
Prime Bank Instruments, Notes, Guarantees, Trades, or Letters of Credit
Prime European Bank Letters of Credit
Prime World Bank Debentures or Financial Instruments
Prime Insurance Guarantees
High-Yield Debenture Trading, Financial Programs, Asset Management Programs
High-Yield Investment Programs (HYIP)
High-Yield Promissory Notes or Bank Notes
Guaranteed Bank Notes
Intermediate Bank Notes
Roll Programs or Bank Debenture Roll Programs
ICC 500 or 600 Bank Debenture Instrument
IMF (International Monetary Fund) Stand-by Letters of Credit
IMF Backed Securities, Bill of Exchange, Bill of Equity, or Backed Bonds
Discounted U.S. Treasury Obligations, Renting or Leasing of Treasury Securities
Blocking of Assigned Treasury Securities
"Limited Edition" or Defacto Treasury Securities
US Dollar Bonds, Federal Notes, Medium, or Mid-Term Notes or Bank Notes
Blocked Funds Letters or Investment Programs, Documentary Letters of Credit
Irrevocable Pay Orders, Collateral First Debentures, Money Center Bank
Fresh Cut Paper or Bank Debentures, Bank Paper
Seasoned Bank Debentures
Private Placement Programs
Private Trading Programs
International Certificate of Deposit (LCD)
Irrevocable Bank Purchase Order (IBPO)
Irrevocable Corporate/Confirmed Purchase Order (ICPO)
Irrevocable Prime Bank Commitment
Zero Coupon L/C
More Prime Bank Investment Fraud phrases to watch for:

Secret trading program
Banks or Federal Reserve will deny involvement in these programs
Non-circumvent / non-disclosure Agreements
Funds are "Good, Clean, Clear, and of Non-criminal Origin"
Funds pooled together for minimum trade amounts of $10,000,000 or $100,000,000 (sometimes listed as "Ten [10] Million USD,"and the like)
Interest rates guaranteed from 6% to 100% to 1000% each month
Trades with only the top 10, 25, or 50 banks in the world, such as Barclays or Credit Suisse
Program backed, approved, or sanctioned by the Federal Reserve Bank (FED or FRB), the International Monetary Fund (IMF), or the International Chamber of Commerce (ICC) or the Treasury Department
"Trader," "Facilitator," or "Broker"
Only 5 to 10 "traders" in the world have access to this program; Trader will conduct 40 trades each year.
Percentage of the yield will go to charity, social programs, or humanitarian efforts
U.S. Government Agencies will deny the existence of these programs because the Government does not want your money to leave the U.S.
U.S. Government Agencies try to seize the funds for themselves
"Due 1, 5 or 10 years and 1 day"
"108" bank to bank certificate which guarantees the principle + 8% annual interest
"Funds of non-criminal origin, are legally owned by or assigned for the participation in a specified High Yield Asset Management Program"
Principal is guaranteed and/or secured by letters of credit "The funds will remain in a bank account that only you are signer on. These funds will be used as collateral."
Offshore trust accounts / tax free interest
Can obtain proceeds through Visa debit cards
Advised to remove from legitimate pension/WA accounts and send funds to self directed pension companies who collateralize the funds with a note, and are then invested in Prime Bank Instruments
Our "Facilitator" has access to the worlds top "trader"
"Trader" "Trading Bank" "Exit Buyer"
The way all banks or big banks make their money
Trades are sometimes referred to as "Tranches"
Only a select few are invited to participate in the trading program
Originally established by the elite families such as the Rockefellers, Gettys, Rothschilds, and the Carnegies.
Fractionalize or collateralize the funds
Fractional banking laws
Hypothecation with insurance companies ($1.2M needed for insurance company to "hypothecate" $l00M needed for the trade)
Investment periods quoted on contracts would be "90 banking days," "one year and one day," or "five years and one day"
Program developed to level out the yo-yo syndrome in the banking industry
"The information contained in this document is for information purpose only and is not intended as a solicitation nor an offer to sell any form of securities"
Invested funds are fully secured by a Bank Endorsed Guarantee
"Cash" Wire Transfer
C&F ASWP
Comfort Letter
"Conditional" S.W.I.F.T. Payment
CUSIP Number
Discounting L/Cs
"Trades are specifically established at a term of 1 year and 1 day, so it does not have to appear on the bank's balance sheet"
Foreign Bank Advice
Irrevocable, Divisible, Assignable, Transferable, Fractionable, Revolving, Confirmed L/C Payable 100% at Sight
Key-Tested Telex (KTT)
Market to Buy or Sell L/Cs
Proof of Funds
Proof of Product
Ready, Willing, and Able (R,W, & A)
Soft Probe
2% Performance Bond
Pre-advise issued by bank
Bank responsible commitment of funds
A claim that the "promoter" has a steady business relationship with a large international bank
A refusal to give "full disclosure" of all involved
The expression "mandated agent"
Standby letter of credit (SLC)

Source: http://www.treasurydirect.gov/instit/statreg/fraud/fraud_primebank.htm