Avoid International Trade and Investment Scams

, ,
Trade Fraud Financial Fraud and
the Joker Broker
, ,
The Art and Science of Smoking out and avoiding
- .
the Joker Broker
A Manual and Guide for Investors, Traders, Businesspeople and the
curious on avoiding International Investment, Import / Export, Finance
and Bank Scams, and on how to conduct basic due diligence on any
potential International deal, for Trade Lawyers, Export Managers,
Intermediaries, Brokers, Agents, and the simply Curious.
By K. J. Southall
Copyright 2010 FTNX/Verde Distributing Ltd.
Revision 1.30, February 2010
Supersedes Version 1.20 July 2009
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Table of Contents:
Preface
Introduction: A wide world, and a trader’s lament.
2. Fraud and the Conman – A History Lesson, and What Fraud Is.
The South Sea Fraud.
The Ottoman Railroad Fraud.
The Match King
3. Fraud and the Victim: Psychology and types of fraud.
The Underground Broker Network Introduced.
Fraudulent Documents, NCND secrets, and Broker protection.
Prime Bank Scams, MTN’s – Real and Fake.
“Double your money” another fraud and more the tell-tale signs of fraudulent offers.
Emotions and Persuasion: Psychology of being scammed.
Credit and Investment Fraud Examples.
4. Letter of Credit and Export Trade Frauds, limits of Bank Mandates and undertakings.
Examples and Illustrations of Fraudulent Product Offers: Copper Cathode,
Sugar, BLCO Offers: “Is it Gold Dust or Brass Filings? Is it REBCO or Crap,
Simply read Platts. A Benin Import Scam, and a Transneft / Sibneft Pipeline
Scam illustrated.
Example of a Scam: “nontransferable DLC, issued revolving, after SGS at
discharge port.”
5. Bid Bond Frauds, and Victim Psychology.
6. More on Due Diligence and select illustrations of due diligence practices.
7. The Honest Wind down, useful resources for you.
8. Yet more useful Resources
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Disclaimer and Limit of Liability
Corporate finance, Trade law, and Securities law, are not matters of play. Procedures and
documentation in these fields can have serious ramifications.
This guide is based on my personal experience, and has been designed to provide
information about the subject matter covered. Nothing in this document is intended to be,
nor should be construed as, legal advice. As stated, the document is intended solely for the
purposes of providing useful general information and education.
Every effort has been made to make it as complete and accurate as possible. It is possible
that there may be mistakes both typographical and in content. Content, procedures,
documents, and website URLs can change rapidly, even overnight, outside of the author’s
control. If you attempt to connect to a site and it is no longer there, please contact the
author so that it can be corrected.
The author shall have neither liability nor responsibility to any entity or person, in respect to
any damage or loss alleged to be caused, or caused, indirectly, or directly, by the
information covered in this guide.
If you are considering any trade or investment opportunity, such as a private placement, a
purchase of goods, or any type legal transaction, the author strongly advises you to
consult with a competent attorney pertaining the advice you require, commensurate with
the specific context and circumstances in which you find yourself.
TRADEMARKS:
Any service marks, product names, trademarks, or named features mentioned in this work
are assumed to be the property of their respective owners. The author uses them for
reference only.
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Preface
Since the initial writing of this guide, we have seen the “slow” Financial meltdown, beginning at the
end of 2008, and proceeding through 2009 A.D – a year that some believe may have marked the
beginning of what may become the greatest financial meltdown in the world’s history.
A point of order, it is possible, perhaps, that this may be a premature assessment. It is possible that
the “meltdown” so described is but the beginning of a longer and more painful process, one that
will make the great depression of the early 20th
century look like a pleasant banker’s picnic.
As in all things there will be winners, and there will be losers.
Some are already evident – we have already witnesses the largest transfer of real wealth in human
history, as undervalued assets were acquired and transferred at a feverish pace by some entities with
the fore-sight to realise the immense opportunity in front of their nose.
As it is, this whole chain of events was initiated by years of outright fraud, from many sources,
private and even public.
Which brings us to this point, the Bernard Madoff Scandal brings back shades of the old early 20th
century “Match King” Mr. Ivar Krueger. Krueger, a man most responsible for inventing complex
financial instruments like derivatives, A and B shares, a man who revolutionized the world of
financial capitalism, evolving it to new heights, and a man who has the distinction of having been
the largest fraudster in history…
Until now.
Thank you for purchasing this work, we wrote the original edition in a world somewhat different
than the one in which we write now. Though a scant two years separates us from when the first
revision of this book was typed hesitantly into a word processor (May 2007) the financial scene
today may well be a decade separated.
You made a good decision by purchasing this work. Let me ask you a single question. Are you
tired of scams?
Are you tired of jumping through daisy-chain after daisy-chain only to find nothing but smoke and
mirrors at the center?
We deal with privileged information, insider tips, as well as and practical, common sense easy to
understand principles on International Import/Export and Investment Scams, how they work, who
perpetuates them, a historical overview of particularly notorious ones, and how to protect yourself,
your time, and your money from “the Joker Broker Trap.”
The information itself is more valuable than the price you paid for this work, a thousand times over.
If you understand this information and use it then you will be astounded at what you will save in
lost time and resources. The complexity of many scams will amaze you, and how easy it is to
recognize them will become clear.
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This book will teach you:
How to Avoid Becoming a Victim of the Scam.
How to avoid being accidentally used by scammers to dupe other victims.
And also, how to protect yourself from the heavy hammer of the law hitting you when the
real fraudsters disappear and leave in their wake well meaning people in the middle who
had no idea they were serving fraudsters.
How to recognize a Fraud 100 yards away – the tell-tale signs that insiders know.
Tell-tale signs of a REAL Gold and a fraudulent Gold Dust offer.
Tell-tale signs of a REAL Crude Oil and a fraudulent Crude Oil offer.
Tell-tale signs of a REAL Copper Cathode offer, and how to spot a fraud 100 yards away.
The Secret to the NCND, what real traders and professionals say about it.
The BEST free on-line sources for Import/Export information.
Little known due-diligence resources to save you at that 11th hour.
What you hold in your hands, or see on your screen, is the Trade Intermediary's and Broker's Guide
to International Import Export Fraud Prevention. To my knowledge, no other work goes into this
detail.
Read on, and benefit.
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Introduction
INVESTOR, TRADER – KNOW THYSELF!
“Know Thyself”. The old reed inscribed upon the lintels of the temple of Delphi.
Or as an old Moroccan associate of mine once quipped:
“Business is the art and science of managing greed – yours, your partner's, and your
customer's.”
Therefore, it behooves a business person to “Know thyself, and know thy GQ”
(Your GQ? Why, of course, it is your Greed Quotient)
Lament:
I am a trader and agent for a commodity trading house. I thank you for buying and reading this
work. I think this information is priceless, and reading and comprehending what is contained in this
report can save you from thousands of dollars in losses, as well as mental anguish and possibly
physical harm, if it is understood and followed.
By purchasing this work you have made an investment in your future and education, be assured
that this modest investment will pay you a hundred fold. Keep in mind that this is a work in
progress and will be continually refined corrected and revised – now that you have subscribed such
updates will be sent to you from time to time free of cost as they are available.
Global trade today is amongst the most lucrative forms of business there is. This applies to
licit transactions and illicit transactions alike. Some illicit transactions are characterized not so much
by illegal products being traded, but by non-existent products being traded for financial
remuneration in which the buyer is convinced that the product he is purchasing is real – this is
essentially deceit and this is the essence of fraud. Fraud exists because it pays massively well to the
criminals perpetuating it. This is the crux of the problem.
So whoever you are, whatever your motivation, and whatever your level of knowledge and
experience, there is a reason for your purchasing this work – for some reason you want the
information it contains. No one knows it all, but if I can share a few things I’ve been taught by
people far more experienced and wiser than I, a few secrets that, perhaps, shouldn’t be secrets, and
if these can help you avoid serious pain is, perhaps you have seen it all.
The Internet is a sea of information. But there is a problem, for as much solid information on it
there is a massive amount of misleading information, or misinformation, as well. In your search for
knowledge of international business you’ve searched Google and looked high and low, finding bits
of knowledge on trading or investing here and there.
However the reality is that most self-taught brokers, intermediaries, and investors learn through
highly expensive “trial and error”. The wheel, re-invented each time. At times successfully, at other
times not. My sincere hope is to advance the state of the art and science, to advance the industry
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itself. It is no exaggeration to state that opportunities for independent non-corporate, home based
trade intermediaries and brokers, have dried up massively over the last few years. The Internet, thus,
has been both a blessing and curse.
A fortune can still be made in International business opportunities by those who are prepared and
willing to acquire the skills and knowledge necessary to find and close deals. And make no mistake, a
fortune can be lost in moments by those whose carelessness and greed causes them to underestimate
the wiliest of people, the con-man.
By understanding the information in this report and implementing its strategies you not only
stand a fighting chance of winning in an industry that seems cutthroat and disreputable to most
outsiders, but you can prevent yourself from falling into the ranks of that most tragic of creatures,
the “Joker Broker”..
This work can be your “get out of jail free” card but only if you understand the material, dutifully
apply yourself and seek more information to put it all in context.
It’s a Big World Out There:
With an email address, web site, and fax machine, or fax-to-email account, you have half the tools
it takes to interact with a huge world of business opportunities. The rest of the tools are mental.
Confidence in what you are doing, believing in yourself and your deal, information, knowledge,
flexibility of thinking.
Smaller traders can compete with larger ones of what seems to be a more level playing field. But
the other half of the equation is harder to obtain. That is skill, procedural knowledge, a dose of
common sense, and extreme patience.
Glance around on the Internet and you will notice thousands of International trade portals and
forums. Within them several tens of thousands of people, perhaps close to a million individuals, all
attempt to buy, sell, trade, and seek to learn the ins and outs of making a fortune in International
Trade.
Today, through the revolution of the Internet, people are interconnected from country to
country as never before. This creates new opportunities for anyone with the will, learning, and
determination to try to conduct international trade. Importers, Exporters, Merchants, traders,
agents, intermediaries, brokers, and distributors all alike, exchange information, deals, and trade
products at never before seen volumes and speeds.
If you read and understand the information in this report you may stand a fighting chance of
winning in an industry that seems cutthroat and disreputable to most outsiders, but that is absolutely
indispensable.
We live in a wide interconnected world, 6 billion people, more than half of whom live in Asia
alone, and the opportunities for global business have never been wider.
Increasing globalization of the markets and the increasingly widespread role of the Internet has
created boundless opportunities. National boundaries have become fluid and permeable, exchange
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of new ideas, new opportunities, new trade, and new investments increase resulting in immense
investment and trade opportunities for millions of people.
Make no mistake, opportunities abound as never before in history, but so do dangers.
The very diversity in opportunities includes good as well as bad.
The world is out there for the taking for legitimate and licit opportunities, but an immense dark
side has risen, and indeed has always been there.
Just as borders are now more permeable to legitimate business, so too are they to illicit business.
Black markets and trade in illicit goods have always existed. Wherever there is a demand for a
product, the enterprising will rise to fill that demand. However such trade is not our concern here.
What is our concern, however, is the exact opposite of trade, licit or illicit. The opposite of trade is
theft. And Fraud is a type of theft by deception.
Fraudulent activities are ever on the rise. The legitimate opportunities out there are attractive
enough to make risks worth while, but the dangers must be understood if you want to have a chance
of making a fortune through International Trade and Investment.
Have you noticed that as you’ve searched Google and libraries, and looked high and low, finding
bits of information here and there, you encounter interesting phenomena: very little practical
information on the art and science of dealing in International trade as an independent trader exists in
any comprehensive way.
Certain practices, documents, and procedures: mysterious acronyms such as “NCND” or
“MPA” are thrown back and forth, badly corrupted model documents and forms may filter your
way, but the reality is that most attempted home based traders, brokers or more properly -
intermediaries - learn through highly expensive “trial and error”. Often re-inventing the wheel
each time, in that ever elusive search for a deal and knowledge on how to close that deal.
This work does not teach the fundamentals of trading – however Davide Papa, CEO of
Australia’s FTN Exporting, has a new book “The World Is Yours II: The Intermediary” that
does exactly that – set the record straight once and for all, on how to successfully do just that, trade
as a non corporate intermediary giving you the intellectual tools you need exactly to begin trading on
your own. Through a special affiliate arrangement, we can arrange for a special offer of “FYBR II”
for buyers of this work at a discount. Information is found at the end of this book.
Nothing destroys sincere aspirations and dreams of success more than being defrauded.
“Defrauded”. “Conned”. “Had”. “Scammed”. The terms are many but they mean the same
thing.
One thing most people encounter very quickly, in their forays into the world of trading, is
the character often scorned as “The Joker Broker”
Defined in the first instance as a bit of a time waster, the joker broker is an individual who
knowingly or unknowingly peddles and plies deals and products that, in the vast majority of
instances, are non-existent, or badly defined. Characterized by a tendency to bluff his way through
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transactions the Joker Broker is the one thing in your trading career that you do not want to
become. Plying deals often involving a string of brokers from one end of the planet to another, and
not a single one has verified the very existence of the goods at hand.
The String Contract, as it is often called, is a necessary aspect of International Business.
Today we are all interconnected as never before, creating new opportunities for anyone with the will,
learning, and determination to try to conduct international trade. Importers, Exporters, Merchants,
traders, agents, intermediaries, brokers, and distributors alike can trade information, deals, and
products at never before seen speeds. But the experience of the underground string of International
brokers trading meaningless offers and circumventing each other left and right illustrates well the
term “Joker Broker” and resembles, often, a Zoo full of monkeys.
Today, if you glance on the Internet and you see a huge marketplace, seemingly ripe for the
picking. Type in any term you desire into a search engine and you will find someone, somewhere,
who wants to buy or sell or trade that thing. Type in “crude oil buyer” or “sugar seller” ore even
“beanie baby supplier” and “presto”, you seek, and you find, you find thousands of trade leads,
thousands of links to people seemingly selling everything you could ever imagine. International trade
portals and forums, and in them tens of thousand people openly seek to trade, and learn the ins and
outs of how to make a fortune in International Trade.
The CEO of Australia’s FTN Exporting once estimated that world-wide close to a million
individuals are now, at this moment, trying to make it as brokers or more properly put trade
intermediaries.
Out that million people, perhaps no more than 1% has the training and skill needed to ever close
a deal. While this is a large number in itself, the percentages are dire, Hundreds of thousands of
people, the over whelming majority, are trading blindly, deals are collapsing, any chance of a well
trained Intermediary making it in this business grows smaller and smaller due to the efforts of their
lesser trained comrade.
As for the rest, they face nightmares of circumvention, getting cut out of deals, back stabbing,
being ignored and dismissed by arrogant principals, and more to the point, being defrauded –
sometimes massively.
As for the 99% out of the fore stated million traders... the stories are well known, circumvention,
getting cut out of deals, back stabbing, being dismissed by arrogant principals.
And for the most unlucky, a fate that ones fears most, a fear each of us harbors deep inside.
The fear of getting scammed, fleeced, and defrauded out of everything we own. Seduced by a
peddler of hot air and broken dreams.
Worse still, the real market for intermediaries, “middlemen” if you will, is collapsing rapidly.
Experienced traders estimated that the year 2000 was the last “good year” in many of their trading,
after 2000 the critical mass of brokers and traders who were ill informed and poorly trained, as well
as of fraudulently applied offers and scams, reached the point that real end-buyers manufacturers
and suppliers simply stopped responding except in exceptional cases.
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For these reasons, and a desire to advance the state of the industry, we wrote this admittedly
“quick and dirty” guide to fraud and its prevention. It is a short “Cliff Notes” introduction to a vast
subject to help raise the level of traders. There are Trillions of Dollars worth of goods traded and
the sincere and diligent aspirant – sincerity itself is not enough – deserves some guide.
Today access to global communications is cheap and abundant, and advice – good and bad, but
mostly bad - seems to just pour from every corner.
However the expansion of global business communications is not without a severe price.
Not so long ago the barrier to entering this world wide market was investment in a solid fax
machine, or even a telex machine, scores of phone bills, and hundreds of hours of research in the
local library.
A generation ago, even finding trade leads was a difficult and expensive process. It took a lot
of resources and expertise to be a trade intermediary. Contrary to some of what you may read on-
line, there is no quick buck in finding deals: it takes a good deal of training, immense patience, and
considerable skills to make it as an independent trader or middleman.
Old timers in the world of trading attest to the huge expenses involved in just sending out
inquiries to source goods, with fax bills sometimes running up to $5 per page. And apart from a few
books mainly for corporate traders, very little usable advice could be found anywhere.
Jeffrey P. Graham, in his critical essay “Evaluating Trade Leads” points out that a good deal
of due diligence on a trade lead is evaluating the company itself that posted the trade lead. Thirty
years ago, finding out how credible a company was a simple matter of checking the telex address and
obtaining some bank references on the company.
The cost of a telex line and machine itself was a barrier of entry to trading, and there were far
fewer companies doing business as traders and intermediaries. If a company used a telex service,
instead of its own telex machine, this in itself was a telltale sign.
In the mid 1980’s when the fax machine spread worldwide, it became easier for smaller companies
to communicate and compete on a global scale.
In the late 1980’s and early 1990’s a few on-line bulletin boards and department of commerce
trade publications published a few buying and selling trade leads. Traders benefited but the barrier to
market entry lowered considerably. The advantage, a more open playing field, the disadvantage
however lies in this.
By the mid 1990’s as the Internet and Usenet became more useful for business purposes, and with
the rise of the World Wide Web the Internet itself emerged as a marketplace itself, and the expense
of subscribing to trade leads became a thing of the past. These are staggering changes and the
process of evaluating a business opportunity posted online is considerably more difficult than it was
30 years ago.
Today, buying or selling leads from around the world can be solicited at low cost or practically
for free. Trade information proliferates, a few forums charge for access but the sheer amount of free
information is gigantic. But as with everything, you get what you pay for.

The problem with on-line portals like Tradekey or Alibaba is that most on-line sources have
no time or interest in evaluating the strength of the trade leads they publish, rather they serve as
large bulletin boards. They are essentially neutral matchmaking services, like an on-line dating
website. People can come on and post what they are looking for, but the medium itself, the network,
can not evaluate these things.
Alibaba and similar portals have an application model in which one may subscribe for premium
access. Supposedly this weeds out the wheat from the chaff. Often it does not, a “premium buyer”
simply pays for “exclusive access” and gets few tangible benefits. There are several legitimate sellers
on Alibaba who choose not to buy “Trustkey” access because they feel it is not needed. There are
hundreds, at least, of verified and paying premium members on Alibaba who are outright scam
artists. Read its forums, and you will see hundreds of such complaints.
Moreover the expertise in recognizing a questionable trade lead or tender request from a strong one
is generally lacking through the Internet, there is no critical filtering of the leads you end up reading.
Anything that can be put out there, is put out there, from the genuine to the questionable, to the
fraudulent.
Moreover, the nature of the “broker network” is such that information is often passed about
with little critical filtering, lack of knowledge of proper trading procedures and the general tendency
of information to become corrupted as it trades hands leads to dangerous results.
While a few on-line educational resources are out there, chief of all is the experts question and
answer forum on which FTN Exporting CEO, David Papa, posts advice to International Trade
questions, besides this and a few books, getting proper knowledge of procedures for an enthusiastic
new broker is difficult, leading to burn-out and great disappointment. Moreover, fraud rears its ugly
head.
Few realize that the Internet is a minefield of traps for the unwary, the most innocent and
authentic seeming tender and offer could have, disguised in it, a veritable bomb waiting to go off in
the eager hands of the person unlucky enough to encounter it. Make no doubt, the Internet has
opened possibilities and made available to countless people business opportunities few would have
dreamed of just a decade ago.
We have all heard the stories, and we have the fear. Is an opportunity too good to be true? Or can
it be our ticket to success and fortune? Is this particular trade-lead authentic, or is it simply a veiled
scam, what about that one?
Good intentions rule the actions of most traders, but sometimes - the most unlucky – find
themselves in a situation that every intermediary fears – being sandwiched between one fraudster
and a victim, being used as a tool to further a crime, that one fear so many of us harbors deep inside.
Of not just getting scammed, fleeced, and defrauded ourselves, but unwittingly being used to scam
others. The lost of respect, the shame and fear, the potential reprisals from law enforcement who
may listen to our pleas and excuses with no sympathy. The real possibility of the real perpetrators
escaping and the punishment due them reaching you... insult upon injury.

Few realize the degree to which the Internet really is a minefield of traps for the unwary, as
with most things being aware in itself is good medicine and can save you great headache,
heartache, and legal bills !
Fraud can cause you to loose everything you own. And the feeing of being seduced by a peddler
of hot air and broken dreams may be worse still. But it doesn’t have to be this way.
Fraud can cause you to loose your liberty. Another factor is that in many frauds, the end results
may cause the victim to be criminally liable as well as sharing civil liability. For example in 2005 a
certain John W. Worley was convicted in a Federal court for his involvement in a scam, in spite of
his claim that he was a "victim". Room mate and House leasing advance fee scams, in which a
scammer poses as a student needing lodging and mails a landlord a check for rent, frequently involve
the hapless victim cashing her check only to be arrested for passing bad checks when it fails to clear!
In many locations, mere possession of a forged financial instrument is illegal, much less than trying
to pass one.

2. Fraud And The Conman: A History
Financial Fraud is nothing new; it has been the invisible silent sister of commerce and investment
from ages of old. For example, in 1720 the world’s first stock market bubble, the South Sea Bubble,
ruined an entire generation of British investors in 1720. The bubble was based around a series of
frauds that led to intense speculation on shares of the British South Sea Company, founded in 1711
to trade in the Americas.
The South Sea company was born in part to rescue the Crown from its debt. The company
purchased the government’s debt and refinanced it at a low rate and in turn was given numerous trading concessions,
including a monopoly on the slave trade. Initially the company’s performance was strong and the government refinanced
another round of its debt through the company.
The mania concerning South Sea shares initiated general conditions in which thousands of unstable
investment frauds and sketchy trades floated through the market with great ease, experienced investors placed their
capital in both sincerely ill conceived ventures (such as a firm designing a perpetual motion machine) as well as more
blatantly fraudulent schemes. Bad intent ruled high up, corruption was widespread in the South Sea Company’s
board, the South Sea Mania led to a stock market boom, numerous IPO’s exploded everywhere as hundreds of other
companies tried to profit from the stock boom.
The environment produced a general speculator frenzy, which griped English society as trading
companies emerged almost overnight, with all manners of hair-brained schemes. Diverse ventures
proliferated and flourished, as hungry investors snatched up their shares of firms like the
aforementioned perpetual motion machine company, companies formed to distill sunshine from
vegetables,. horse insurance companies, companies devoted to: “improving the art of making soap”, or
the “improving of gardens”, to the queer little company formed “for the transmutation of quicksilver
into a malleable fine metal” People lined up to invest in such venture. Was there an end to this
madness?
The all time classic (and remember, this was a publicly traded stock, dear reader) was a company
formed:
“For carrying on an undertaking of great advantage; but nobody to know what it is.”
One can’t help but think that the individuals who cooked up this company went laughing
all the way to the grave!
Overnight people became nobility as titles were bought. Many companies formed quickly, issued an IPO, made a lot of
money and vanished weeks later as their principals ostensibly ran to the Americas with their investor’s money, to
properly invest in overseas ventures, but in reality simply running away to the local pub a few towns down the road.
Some semi-legitimate companies claimed to, at least, hunt gold, or tobacco in the New World. We
are quite sure, however, that the principals of “the undertaking of great advantage” or the
makers of the perpetual motion machine were quite self conscious about their fraudulent intent.
Scammers can have refined senses of humor!

Even Sir Isaac Newton’s scientific mind was caught up in the frenzy, but wisely realized the
instability of the bubble. Sir Newton liquidated his shares, for a handsome profit. But the bubble
seemed to endlessly expand the famous scientist reentered the market and bought more shares. This
mistake would later cost him 20,000 pounds, once it became known that the South Sea Company’s
management liquidated their shares utterly, and widespread panic ruled the market.
Alexander Pope, the famous poet, figured things out quickly and sold before the height of the panic,
earning himself an absolute fortune. Others, like the author of Gulliver’s Travels, Jonathan Swift,
lost a fortune himself. Swift’s novel was written in disgust as a satire about English society.
While the con men who formed the upper corporate management of the South Sea company fled
with their fortunes overseas, Many generations of Englishmen afterwards were affected by the ripple
effects of the first stock market crash in history. It took a century for the economy to fully recover,
and this disaster molded English society in particular lines that still reflect in Anglo-American
societies to this day.
This historical example displays all of the classic traits of the financial fraud, which we will outline
shortly. But for now remember not only its ludicrous excesses, but also its basic structure, very well.
Example 2
In the 19th
century the Ottoman empire’s decline and fall was aided by ill conceived investments
peddled by International Business “men of mystery” such as Langrand-Dumonceau, an entrepreneur and speculator
with legitimate high level connections to high financiers and merchant banks, whose schemes earned him a 15 year
penal sentence in absentee from one European Country; men who, in their charisma, managed to convince sovereigns of
what was once one of the most powerful super-powers in the world to take out loans, at 60% interest, to invest in
unimaginably ill conceived public works projects whose failure resulted in the Ottoman state dedicating 2/3’s of its
gross revenue to servicing constantly rescheduled and re-financed debts, and eventually led to the fall of its government.
The most interesting thing about this example is that sovereign heads of state were convinced by
financial adventurers to contract out the building of a rail-road, a strategic undertaking, into the very
heart of their empire, to an enemy – Austria – who not only sat on their borders but actively
encouraged session in the provinces buffering turkey from Austria.
This being the case, still a railroad contracting concession was passed to Van der Elst and Cie, a
concession that was then bought out by Langrand Dumonceau, who helped negotiate the original
concession, who in turn passed it onto Baron Maurice de Hirsh, with whom Dumonceau was
partnered in several other ventures throughout Europe. Construction of the railroad was financed by
bond issue after bond issue, by debt rollback after debt rollback, all occurring as the concession (and
ownership of the debt) passed through hands like baseball cards, around a circle of more-or-less
related finance men.
By the time all was said and done, Baron de Hirsh could safely settle his accounts with the Turks,
and retire in wealth, passing on his role to Deutche Bank, while leaving the Turks with some
partially finished railways. Variants of this same basic scam continued through the close of Ottoman
civilization, the Mecca to Istanbul railway for example. The historical irony of the Turks being the
biggest con-Marks in history is given a somber cast by the events leading up to the First World War,
the ethnic violence, terrorism, and revolutionary movements in outlying Ottoman lands forcing their
Caliphs to cede greater and greater degrees of autonomy, increase taxes at home massively to pay off

almost crippling interest payments, and finally collapsing. The sick man of Europe died of financial
flu, more or less.
A similar example can be found in the German’s case, after the First World War, and is
explored in Anthony Sutton’s “Wall Street and the Rise of Hitler.” The case of financial
improprieties in Wilson’s American administration, and in certain German Industrial and Banking
circles, is quite politically sensitive, very nuanced, and far too complex to explore here, but I do
recommend the book to the astute and historically trained reader. Dr. Sutton’s work is well
researched, rigorously argued, and shows the degree to which such financial scams can change the
destinies of entire continents.
Example 3.
The Match King
The name Ivar Kreuger rarely rang a bell nowadays, at least until the row regarding Bernie
Maddof’s manipulations hit the press. Kreuger, more than any other many, was responsible for the
creation of many of the sophisticated financial instruments and derivative contracts that we now
take for granted, a financial genius and entrepreneur, the tragic thing about his legacy today is that
the sole thing he is mostly known for is having perpetuated one of the greatest frauds in Wall Street
history.
The few sources that mention Kreuger generally class him as a clever market manipulator who
monopolized the match industry by fraud. The truth is far more complex.
Kreuger setup one of history’s most extensive ponzi schemes more or less, at first, by accident. Out of the necessity of
financing a legitimate company. A civil engineer by trading he became an entrepreneur on co-founding a construction
company. He groomed his self step by step to mastering the art of the financier.
In the process Kreuger invented and developed very innovative financial instruments (such as the derivative) and
through highly aggressive investments built his firm into a wooden match trade monopoly, and soon he held a global
financial empire, dominating the wooden match trade throughout Europe, Central, and South America. He came to
control two thirds of the world’s match production and was, by all accounts, "The Match King."
He was reportedly tutored in the inner workings of high finance by Oscar Rydbeck, a Swedish
banker who became a close associate and consulting financial advisor for him from 1912 until his
1932 Crash.
The 1930’s financial crisis of following the stock market crash exposed a very shaky ground
underlying his commercial empire, in offering fantastic profits to his investors he utilized a sort of
ponzi scheme similar to what Bernie Madoff, decades in the future, would also utilize.
Sadly in Krueger’s end he shot himself dead in March 1932.
Unlike Madoff, of course, Krueger actually produced tangible products, dominating the world in it.
But his enterprise was no where near as profitable as he represented to his investors, and he used
incoming capital from new investors to pay dividends to older ones. In a way similar to Madoff.

In essence, Kreuger was robbing Peter to pay Paul. The initial impetus was innocent, but in order
to maintain the veneer of success for profit hungry shareholders he drove himself to great depths of
deception, and in the process invented some of the world’s most innovative financial instruments
even conceived.
Things don’t change that much. Legitimate Commerce, trade, and profit, always are tailed by
outliers - scammers who siphon off the hard work of legitimate hard working entrepreneurs and
investors. Our argument is that they are, indeed, statistical outliers to financial capitalism and free
enterprise, however they do have a role, affect history, sometimes massively, and affect our lives in
many ways.
And as always, unrealistic expectations of profit, and sheer greed, continue to destroy fortunes and
lives.
The Fraudster leaves, in his wake, misery and suffering. He is the ultimate “Economic Hit-man”.

3. FRAUD AND THE VICTIM
Who is the Con-man? Fraudsters, Confidence men, Scammers – they are a certain breed of
highly intelligent, and highly motivated, criminals who operates by using their advanced knowledge
of psychology to lull their victim into a psychological haze, a comfortable feeling of trust and
confidence.
It is possible, and unwise, to underestimate the victim of such frauds. To dismiss them as
clueless idiots and ill informed fools. This is an unfair depiction. Studies reveal that victims of such
fraud tend to be financially knowledgeable and sophisticated, generally more optimistic about life
than other people – and hence less cynical, and often suffering from financial stress or ill health.
In other words, ordinary, otherwise happy, individuals who are often well educated, understand
money and investing, and who are put under some stress by life’s situations. They typically see an
opportunity to make handsome profits and gains, and relieve their distress. Even legitimate financial
advisors at times persuade their clients into investing into marginal investments. Remember, at all
times that the broker gets paid, or in gambling terms “the house always wins”. In the case of
sophisticated hedge funds, for example, the manager typically gets paid a percentage of the principle
assets, irrespective of the fund’s performance, as well as a performance bonus. In the case of
ordinary stock brokers, they get a commission off every transaction you execute. Millions of ethical
financial advisors worldwide do honor their advisory role, but never forget that it is your money
in question, and you have the primary responsibility in ensuring its growth. Some of the most
financially savvy individuals have been convinced to sink massive sums into some of the worst
investments.
It is important that you understand why victims are fooled. In this way you can objectively see
the psychological processes at work, and recognize these same processes at work when you are faced
with a fraudulent investment.
Experienced scammers are adept at using highly emotional sales pitches. Some are well trained in
the science of “NLP” – neuron-linguistic programming, a set of cognitive techniques developed by
Dr. Bandler et al., which have the ability to bypass certain aspects of a person’s critical perception.
Many salespeople are well trained in NLP, as well as many the smooth “player” and “pick-up artist”.
It is possible to manipulate an intelligent person linguistically by making reference to highly emotive
terms that short circuit a person’s ability to exercise critical thinking. In fact, some of these
techniques work better on highly intelligent and highly imaginative individuals.
Edward Bernays, the founder of the modern science of Public Relations as well as Propaganda was
a nephew of Sigmund Freud. The state of the art and science of psychology and the science of
persuasion have advanced greatly since the turn of the 20th
century!
A successful sales pitch will contain certain emotional elements to secure a rapport with the
victim, gain credibility and trust, and invoke a sense of urgency. Most importantly, to invoke a sense
of greed' and desire. Indeed greed is the scammer’s greatest tool, and the greatest key to the victim’s
downfall. These emotional tools and suppress normal critical thinking abilities and skills, dull the
“hmm... now does this actually make any sense?” instinct.

So We Speak of Types of Fraud: International frauds continue to grow as the years go by. The
predominate type of International fraud is a certain type of Advance Fee fraud, often called a “419
scam” and out of this “Prime Bank Instrument” fraud or “High Yield Investment” program fraud
stands as predominate. Other types of fraud involve trading opportunities in commodities, scrap.
Certain traits stand out in business opportunities that are actually disguised frauds, of course
legitimate opportunities may be marketed using similar traits and language, the buyer has to be astute
and really study what he is looking at, but seven common tell-tale signs of a fraud are:
1) Promises of unusually high returns. Doubling your money in six months is generally a
sign of fraud.
2) Claims that the investment is personally guaranteed, guaranteed, insured, or otherwise
has little or
no risk
3) The advisor places a good deal of pressure to invest immediately because of a deadline
or lack of openings
4) Encouraging you to borrow money from equity in your home to invest and
maximize your profits
5) Vague descriptions about how your money will be used, or what the company
actually does
6) Claims that other people close to you, in your church, workplace, or community,
have already checked
out the investment and are investing.
7) Claims that the investment involves some sort of special new technology that can
solve a problem that big companies in that industry cannot solve
Remember, the Absurd claims of the South Sea Bubble? Nothing really changes.
No one earns 200 – 400 % returns on their investment (ROI) in 4 weeks unless by some
astronomically lucky and unlikely fluke. Such flukes are historical in import and occur so rarely that
they are not worth mentioning.
Of course these signs do not absolutely mean that what you are looking at is a scam, but real
Trading Opportunities, Investment Opportunities, and Commerce Opportunities, typically are
phrased in more sober language and downplay the inevitability of “massive profits” in “incredible
opportunities” that won’t last long and that “guarantee big profits!”
Regard the words “Double your money in six months with no risk whatsoever!” as a code-
speak for “Give me your money now sucker.. please!” They really mean the same thing.
Real estate seems to be somewhat of an exception to the rule, we have seen astute real estate
investors and entrepreneurs receive 15 – 30% Returns on their investments rather quickly, we have
also seen them go into foreclosure and bankruptcy. Real Estate often tends to out perform the stock
market, but there is considerable evidence that the Real Estate boom in the USA and some
other parts of the world is simply a large disguised bubble. And we know now, that Bubbles =
Trouble.
A real precedent is the Asian financial bubble of the 1990’s which involved massive over-leveraging
of real estate, similar to the residential mortgage situation in the USA today. In fact, mortgage fraud

was at all time highs around the turn of the millennium and many hot markets are now seeing
record, tragic, rates of home loan default.
As for export trading, any sort of wholesale trading is typically done on thin margins when one is
dealing with commodities. One makes one’s profits in volume, a thin profit margin in high volume.
2% - 10 % markups per metric ton add up quickly when one considers that the net weight of your
average 40’ shipping container is over 26,000 lbs. It doesn’t take many containers to reap a small
profit, and bulk carrier shipments of goods typically involve tens of thousands of metric tons.
Expecting a Return higher than 10% on an export shipping venture is highly unrealistic, unless
one is dealing with highly specialized manufactured goods such as types of machinery. The freight
component alone reduces profits immensely.
Fraudulent Trade Document References:
Let’s get this out of the way first. These will be controversial points, and I am sure to be “called
out” for making them, but honesty must rule. Certain documents have no accepted place in
International Trade, or are only used in certain niche industries as the custom of specific trades.
They have no wider bearing outside of those trades, being simply relics of earlier procedures that
still live on today, having no pertaining to the wider world of modern trade. Knowing which
documents are common in a particular trade can save you much time and headache. Ambiguous
documents create deal frustration, which is a specific matter often resulting from what is called, in
trade law, the battle of the forms..
While certain documents may have internal usage in a particular country’s trade, but have no
standard use in certain trades and industries, such as Sugar, Gold, Copper, etc., when you see
specific documents mentioned in a transaction, these are sure tip-offs that you are dealing with a
sketchy transaction and, likely, an inexperienced trader, or an outright fraudster. Seeing the terms
“BCL”, “MPA”, “MFPA”, “Paymaster”, “Seller’s Side / Buyer’s Side”, “NCND”, or the like,
in such an offer, is a tip-off that the offer as one sees it is not directly from a principal in that
industry but has been extended by an intermediary of sorts. Some of the most notorious “Joker
Broker Documents” are:
The Irrevocable Purchase Order/ IPO ICPO:
Sometimes known as the Irrevocable Corporate Purchase Order, such a document simply does
not exist. Or to put things more rudely, - the ICPO – is crap. There, we have said it, let the chips
fall. Sometimes the Letter of Intent (LOI) – a document frequently used in some countries and
some industries to establish corporate intent for some undertaking, such as to purchase real estate,
or to enter into some sort of deal, but with no standard usage in International Trade where the
LOI stands for Letter of Indemnity – is attached to the IPO or ICPO making a rather barbarous
sounding “LETTER OF INTENT / IRREVOCABLE PURCHASE ORDER”
The standard preamble usually goes like so: “We, (insert company) hereby state and represent that it
is our intention to purchase, and we hereby confirm that we are ready, willing and able to purchase
the following as per the specification and in the quantity as specified in the terms and conditions as
stated below. This representation is made with full corporate authority and responsibility of the
above…
The Fee Protection Agreement and NCND:

In the first instance, internationally the Non Circumvention, Non Disclosure agreement isn’t worth
the paper it is written on. Notoriously hard to adjudicate against and enforce, the reference to them
is a sure sign that one is dealing with an ill-informed broker of some sorts and not a Seller or End-
Supplier.
As for Fee Protection agreements, the above is noted again. Matters of Commissions, consultancy
fees, or finder’s fees, lie outside the scope of this work. However suffice to say anyone claiming to
be a “Mandate” or actual seller who requests these documents isn’t what they claim to be. A
mandate fears no circumvention because her interests are protected by the one extending a mandate
to her. So by definition a mandate does not need fee protection, or circumvention protection. And
while an actual seller may be circumvented - with ease if he is incompetent - he will protect his
interests in other ways.
The problem is that the intermediary in this case may not be properly informed and one cannot be
quite sure that the offer itself is real unless the intermediary agrees to step back to her principal
supplier or seller, and expose the same.
“Catch-22”, at such a point the intermediary is technically circumvented, and sites in a supremely
vulnerable and exposed position. While honor and good business demands that a principal protect
that intermediary’s interests in good stead, and pay them an honest commission if a deal closes,
honor and good business practices do not always rule the day.
Once you are introduced to the real seller in question and can verify the goods are real. If you steal
the broker’s deal then you yourself have acted with fraudulent intent, of course, and performed
something quite stupid – that individual could perform further business services for you as an
independent agent, and you have tarnished your reputation, while further contributing to an
environment of fraud.
At some point you may discover there is no real product, however, or principal – just chain after
chain of deluded individuals offering products they thought were real – congratulations you just
exposed something important. You may find yourself led back to an actual principal whose terms
indicate that they are actually fraudulent and criminal – congratulations on your detective work, such
sleuthing would make Sherlock Holmes proud.
Scammers are the fat spiders sitting at the center of many an ill advised “Full Corporate
Offer.
The goal of the Scammer is to extract as much money from you, his victims, as quickly as possible.
Through multiple tactics, the scammer can often bypass the built-in abilities of even well
informed and careful individuals to detect deception. The victim, or “the mark” “the mugu” may
have considerable ability to detect and resist efforts at persuasion. But through considerable
charisma and seductiveness this haze is imposed, clouding the mind subtly. Victims often claim
afterwards "it caught me off-guard." "I don't even know what I was thinking.”
One report quotes a scammer as saying "My pitch put the victim in a haze of ether. I wanted to sell them as
soon and as often as I could before the ether wore off."

A haze of ether? This phrase has more truth then you would think. It is easy to understand
why scammers commit their frauds, by stint of wits, charisma, and sheer bravado, and no other
skills, they can make easily unimaginably large sums of money. There is the “high”, the feeling of
elation coming after one “gets over” another, it comes to some people when they successfully pull
the wool over another’s eyes.
Fooling others, and stealing their wealth, is an ego affirmation to a scammer. It convinces him or her
that they are clever, sophisticated, smarter and someone “better” than the victim they whose trust
they abused and defrauded. The attitude is a corrupted sort of Darwinian thinking, the idea that
certain people are wolf, and others are sheep to feed the wolf, or to quote Boyd Rice:
“The strong eat the weak, the clever eat the strong.”
In the case of Prime Bank Investment frauds, or frauds involving trading BG’s and MTNs, the
fraudsters seem to belong to an informal body of a few hundred Europeans all known to Interpol
and the American FBI, many of whom are periodically caught and serve some jail time, and then are
able to retire off their loot before returning to the seductive thrill of the fraud.
In other cases, many scammers seem to emerge from Nigeria, and a few other African
countries. Many rationalize their criminal behavior by arguing that they are really engaged in a sort of
economic warfare, “getting back at:”, “getting even with” Westerners for the sins of their Colonial
forefathers who, they argue, stole their ancestors’ wealth and looted their home-lands. Of course the
people who benefit from these frauds don’t seem to “re-invest” their ill-gotten gains into their
homelands, rather they live “high off the hog” leaving their com-patriots to poverty and the ill
repute that their activities cast upon their country. Such rationalizations can be safely dismissed. It is
true that at a certain level, many developing countries have themselves been defrauded and exploited
in the past.
In other cases, some perpetrators seem to emerge from Eastern Europe, Israel, and China,
with connections to organized crime cartels in these countries. Many of the African scammers are
also connected to informal or formal organized crime groups in their countries of origins.
Some suspect the role of Intelligence agencies but while such a thing can’t be discounted, there
is no hard evidence pointing to this.
There are origins far more diverse, in general countries with poor white collar crime regulations,
or marginal enforcement, with large degrees of systemic corruption, seem to be havens for this type
of scammer.
Through the use, or rather abuse, of off-shore banking havens by abusing the confidentiality and
anonymity these centers offer to their patrons (confidentiality that is the right of every individual to
enjoy, we argue), the successful fraudster can enjoy a comfortable life out of the reach of their
victim’s ability to pursue.
So you see the temptation; make money, with few marketable skills other than a quick mind and
the ability to lie through one’s teeth, and get a powerful emotional kick once one fools another – it
is, in essence, a “power trip”. At the end of it all, retire to an offshore haven.

Of frauds there are so many different types:
Prime Bank Instrument fraud, in short, involves trading in financial instruments whose
investment is purported to yield massive astronomically high yields to the investor. The instruments
invested in or the programs used to invest in such purported instruments are set up in a fraudulent
way as to ensure massive transfer of a would-be investor’s hard earned money into the coffers of the
fraudster. The mechanisms of this type of fraud are little known in spite of the massive
predominance of this type of fraud. Hundreds of millions of dollars each year are lost to the highly
motivated, enterprising, creative, and often quite ruthless scammers who develop these fraudulent
schemes.
Advance Fees: The term advance fee refers to any up-front payment paid in order to secure a
particular service or good. In this context advance-fees refer to sums paid by a would-be investor to
participate in an investment or businesses transaction in order to “smooth” the transaction along or
enable it to proceed. Generally an advance fee is required of the would-be investor in order to
enable him to participate in a much larger financial transaction that he believes will bring him greater
profits or result in credit being extended to him.
Stated reasons for these fees vary, bank fees, “baksheesh” or bribes, “gifts” for bank officials or
export officials, or often seen in African Gold Dust scams gifts for tribal leaders &tc., fees for
inspection agencies, fees for freight forwarders. As can be seen these are all plausible stated reasons.
In the vast majority of cases such reasons are bogus and the real reason for the fees being required is
the financial gain of the person requesting them.
In theory, not all advance fee’s are fraudulent, in general however any legitimate and well
structured opportunity will have a responsible escrow mechanism set in place to ensure up front fees
are protected. Again this is theoretical, in reality 9.5 times out of 10 such transactions tend to be
fraudulent anyway or at least display all the hallmark signs of a fraudulent transaction, as we shall see
later in the report.
An individual is contacted by a stranger and informed of a trade opportunity or investment
opportunity. They are presented with a program that seems well structured. In order to engage in
the opportunity certain fees are required. The actual larger transaction itself is bogus and the would-
be investor, or rather victim, never actually makes a profit.
Examples of Frauds Illustrated:
That old saying “In God we Trust, all others we verify!” is an understatement. Here are a few further
examples of banally typical financial frauds, in knowing what they are you may refine a “taste” and
“feel” for the same.
Underground Intermediary Networks and Financial Intermediary Fraud:
A basic High Yield investment fraud occurs in which an individual approaches you, informing you
about an “Underground Network” of high finance intermediaries, bankers, loan officers, agents,
facilitators, mediators, and the like, who trade various deals and financial instruments such as MTNs,
other types of Notes, Letters of Credit, and so on. One purchases from one who purchases from
another and so on.
These are examples of different types of Financial Intermediary Fraud solicitations. Read them,
study their features well, and notice any patterns that you see. Soon we will explore them in greater

depth and reveal exactly what is wrong with them, but for the time being simply examine them
closely.
This is an example of a well done investor fraud. It is much less amateurish in nature than most
solicitations we receive. Its sophistication makes it all the more dangerous.
From Mr. Rob Edmunds (President)
Good Day SIR,
I write to you based on a request by an investor and his need for investment/funds Transfer.
My name is Rob Edmunds Esq. a Financial Consultant/Attorney based in London. I am a South
African who naturalized in Ireland.
My company most times represents the interests of very wealthy Investors/Individuals due to the sensitivity of
the position they hold in the society and the unstable investment environment of our country, they evacuate
majority of their funds into more stable economies and developed nations where they can get good yield for their money.
I was recently approached by a Reserved Client of mine, whom I had personally worked with a few years ago
when he was a Finance Minister and wants me to source for a reliable and trustworthy individual such as
yourself, who will be willing to receive money on his behalf abroad, and at the same time advise on what form
of investment that will be embarked with the funds when perfectly received.
The client has offered these terms:
1. 25% commission paid to you upon receipt of the funds through the original sum to be transferred. The
funds in question are $50Million US Dollars.
2. Your details will be used to have the funds evacuated and you will stand as the principle owner of the
funds and will deal directly with the Remittance institution without the involvement of the Investor.
If these terms are agreeable to you, kindly let me know and I will provide you with all necessary information
and procedures involved.
Sincerely yours,
Rob Edmunds ESQ (President)
E.A
EDMUNDS & Associates Limited.
PS*The client is willing to make available the fund to your possession and in your country within 3 days of
confirmation of your capabilities
We got a number of almost identical emails of this nature from different accounts with the subject
line “Investment Manager”. For its sophistication the criminals peddling it appear almost monkey
like in the repetitive nature of what they ply.
Here is another example of a similar, but a bit cruder fraud:
Subject: Investment Manager
From: Mr M**** N*****
Investment Manager [SBSA] Thanks for finding time to read this proposal. After thinking about this
transaction and the need to make contact with someone to assist me do it, I found it interesting and decided
to contact you for this business transaction. Be so kind to contact me at your earliest convenience for a possible
business deal involving money transfer of about $52,000,000.00. I am presently in South Africa working as an
Investment Manager with the below bank at their offshore department. With your sincere assistant and co-
operation, I am determined to work this deal out if we can do business. As at this moment, I am constrained to issue

more details about this business until your response is received. If you are not familiar with the above information
which I believe is scanty for security purposes, please contact me for further details. We will start the first
transfer with thirty two [$32,000.000 USD] upon successful transaction without any disappointment from your
side, we shall re-apply for the payment of the remaining amount to your account. Warmest regards, Mr *******
Investment Manager, Dept.of Offshore Mortgage Services, Standard Bank, South Africa
Next, an even cruder example:
I Am Dr. Edmund Kofi Yeboah, a senior chartered Accountant, I work with International Commercial
Bank (Ghana) Limited. There was a foreign client who has Nine Million USDA ($9:000:000:00) in his
account with my Bank, who just die leavening the money without any next of kin.
So my dear that is why I need you as a foreigner to stand as his next of kin to claim this money. I promise
you, if you stand as the next of kin to this business man [our client] and receive this money in his behalf as his
next of kin, the sky will be our limit, and there is nothing to worry about.
Thanks and God bless you for appreciating and acknowledging this letter.Hope to hear from you.
Please if you are really interested about this business write to me with this email address below I will
tell you what to do, for us to get this money.
Dr, Edmund Kofi Yeboah.
Please reply to this my personal, email.
********@hotmail.com
We shall explore what the defining features of this fraud are. For now it may be hard to see the
danger in the proposal, we shall explore it in good time. Some things that are glaring are that in both
cases the buying principal is asked to do something questionable – that is to pretend to be someone
he is not to receive the funds into his account. As a foreigner are you really next of kin to the
unnamed foreigner who died with $9 mil in his account?
We thought not.
Do bank managers in charge of several millions of dollars routinely approach complete strangers
using throw-away free e-mail address accounts?
We think not.
Often such offers are heavily traded in underground broker networks full of quite sincere
individuals, which are often quite extensive and mirror similar Import/ Export intermediary
networks – For example Uncle Boutros in Cairo is contacted by someone who is selling MTNs or
BG’s – he contacts someone in Marrakesh who calls his cousin in Paris who calls his ex-roommate
who works for a financial brokerage house in Sweden who calls up Bob in Idaho and so on – this is
what is termed “a daisy chain." By the sixth intermediary the terms of the deal in question have been
so marked, sanitized, and redone, that even if a savvy trader was able to force everyone to step back
to their principal the whole affair just becomes an exercise in futility.

At the end, anyway, such products are almost always fraudulent in nature. Offers involving types of
debentures can not be legally traded without a securities license in the USA and several countries. As
for pretending to be the dead relative of someone the morally sketchy nature of such a transaction is
apparent on its face.
The Medium Term Note
For the record- Intermediaries can not legally trade in Medium Term Notes, so-called “MTNs” in
the USA – without registration with the SEC.
I previously stated in a former edition that the “Entire MTN intermediary market worldwide is
fraudulent. Period.” This, of course, was a slight exaggeration. So slight, however, that I am
without embarrassment.
MTN’s – Medium Term Notes – do exist.
They represent a securitization of the debts of corporate, national, and even international entities. In
the USA registration of MTN’s was mandated in the early 1980s by the SEC’s adoption of Rule 415.
MTN’s exist from entities such as Sallie Mae to the World bank, securitizing obligations from the
housing market up to Eurobonds.
MTN’s – in the USA – are registered with the SEC, and are rated, just like corporate bonds, and a
real secondary market for them does exist. Similar instruments exist on the Eurobond market.
They are bought, and sold, by dealers, and an institutional trade in them does exist. The trade that
exists, however, is nothing like what is described by Internet based sellers, and the probability of you
actually getting access to a transaction involving hundreds of billions of dollars in MTN notes is
utterly improbable
Many will choose, of course, not to believe us, you are welcome to contact us privately for our
rationales for the statements above. Any legitimate investment advisor however will gladly inform
you that the Internet broker based market for MTN’s is entirely, or at least almost entirely,
fraudulent.
In the off rare chance that you actually do have access to the trade of a legitimate MTN, a once in a
million chance at best, then the procedures you would need to close such a deal – safely – without
circumvention of endangering your freedom, or life even, would proceed along lines similar to those
advised in David Papa’s “Follow the Yellow Brick Road: step by Step” (FYBR:SBS 1& 2)
And there, still, one would need to be an accredited investor to legally participate in a legitimate
private placement investment program, which are about as rare as a blue moon.
Another Fraud
This fraud is similar to the ones above but features a special clincher at the end:
FROM THE DESK OF MR RAHIM RAHMAN
MANAGER AUDIT AND ACCOUNTING DEPARTMENT

BANK OF AFRICA( B.O.A )
I am Mr. Rahim rahman, Manager Audit Accounting Department BANK OF AFRICA( B.O.A )I
would like to know if this proposal will be worth while for your acceptance.
I have a Foreign Customer, Manfred Hoffman from Germany who is an Investor, Crude Oil Merchant
and Federal Government Contractor that was a victim with Concord Air Line, flight AF4590 killing 113
people crashed on 25 July 2000 near Paris leaving a closing balance of Twelve Million Eight Hundred Thousand
United States Dollars ($12.8m) in one of his Private US Dollar Account that is been managed by me as
the Customer's Account Officer.
Base on my security report, these funds can be claimed without any hitches as no one isaware of the funds
and its closing balance except me and the customer (Now Deceased) therefore, I can present you as the Next of
Kin and we will work out the modalities for the claiming of the funds in accordance with the law.
If you are interested, Please call me +22676642303 to discuss in further details and our sharing ratio will
be 60% for me and 30% for you.while 10% will be for the neccesary expenses that might occur along the line.
reply privately to (rahim_rahman001@yahoo.fr)
Thank you,
Sincerely
Rahim rahman.
N.B.In other for you to beleive me honestly try and go through this
(website)before you start with me.
Below is the website. (http://news.bbc.co.uk/1/hi/world/europe/859479.stm)
The clincher is the collateral information at the end. The link to a real news story of a real plane
crash whose tragic victims included some individuals of note. The reader may loose his sense of
discrimination and view this offer with a greater degree of legitimacy. This is a common and odious
psychological tactic of the fraudster. Also, nothing is accidental, the misspellings and bad grammar
are also purposeful, to convince the reader that they are dealing with someone from a different
culture who may be less sophisticated than they are.
Legitimate traders have stated that in some industries, namely Petroleum, from time to time such
networks of brokers are actually leaked faked offers emerging from major oil companies in order to
“test the market” in some manner. We have our suspicions of other industries as well
In the case of Precious Metals, particularly Gold, such daisy-chains of well meaning
intermediaries peddling fraudulent offers is notorious. Unless one is dealing with a brokerage or
merchant house of particular repute, one must apply the levels of due diligence and independent
research we discussed previously on a seller before jumping onto a transaction.
Learning as much as one can about metals markets and industries, or financial instruments, or
Petroleum markets, etc., is easier today than ever before because the Internet has billions of pages –
some fluff but much of it highly educational – on various markets and industries.
It becomes a question of diligence versus laziness, in many cases.
Research and gain a thorough understanding of every aspect of the product of interest, history,
value, trade and market routes, uses, noted sources, noted dealers, politics of the industry, and more.

When the volumes being traded are substantial, so too are the risks and complications – seek
expert advice from reputed dealers, traders, and industry experts. A bit of politeness and tact and
sincere appreciation for advice given goes a long way.
Credit Program Example: A common example:
Someone requires a significant loan or credit extension. His bank is unable to provide this to
him, for whatever reason, lack of his creditworthiness (in the bank’s eyes) or due to specific terms.
The businessman is desperate and considers hard money lender but lacks the collateral to put down
as security.
One day while reading a business weekly or daily paper sees an advertisement for credit programs
of up to, say, USD $1Mil. Friendly terms and fast settlements are mentioned. This sounds perfect!
He calls the number in the newspaper and visits the website mentioned. He finds out that he
actually can qualify for a loan of $3 million but first must put down a loan origination fee, or an
arrangement fee, or something similar, of $25,000. The borrower has the cash available and needs
the loan so is willing to pay this initial fee. He fills out the application, submits the fee, and waits…
And waits..
And, of course, never receives the loan. He looses his money. A significant sum. The fraudster,
sitting in a boiler-room office space rented in a half vacant strip-mall in some small town in a
nameless country is repeating this same scam, over, and over, and growing $25,000 richer every
time.
Prime Bank Investment Example: OF course the variations on this theme are only limited by the
ingenuity of the scammer. They can be as simple or complicated as the scammer likes. A human
tendency to be easily impressed by convoluted and complicated programs and schemes can work in
a scammer’s favor. The example below comes from literature by an investigator at the Hong Kong
Bank and is based on an actual real fraudulent transaction:
A businessperson hears about a fabulous new investment program, normally
restricted for exclusive and high net worth individuals. However one individual has an insiders
access into this program. It is a program that gives one access to a secret clandestine secondary
market for financial instruments. This secondary market is usually known only to major
international banks and their officers, and the instruments they trade in are “Prime Bank
Guarantees”, or “Standby Letters of Credit”, or “Acceptances. By trading in such instruments it is
possible to make enormous profits in a short span of time, however in order to play such high level
financial games would-be investors must demonstrate their high net-worth and show that in this
market the victim is told he needs to demonstrate that he has available capital. HE is asked to
deposit some FUNDS into a bank account, at say, USD $1 million.
For safety he is told that he will be the only person who is a signatory to the account
and he has not been asked for any payment per se, so he feels he is not at risk. Meanwhile the
fraudster requests that the would-be investor make arrangements for his bank to issue a Blocked
Funds Letter, stating that the deposited $1 million is blocked in the account for a year and a day.
This is explained to the would-be investor as a further demonstration of financial capacity.
In the meantime this whole process is fairly meaningless to the bank but it issues the
letter to comply with its customer’s wishes, seeing no risk in the matter.

At this point the game becomes very interesting: The fraudster uses this letter in
another Country, Country B, as collateral material to help persuade another group of would be
investors to join a scheme by placing a deposit on a fabrication plant being sold off at a fraction of its
value, which will eventually be shuttered and sold for scrap at a handsome margin.
At this point the fraudster has the actual funds of the would-be investors in Country B and
simply disappears with their money. Now, he turns around in Country A and persuades the would-
be investor there to tender USD $20,000 as an arrangement fee, which will allow him to start
trading in the Prime Bank Guarantees in earnest. Since the would-be investor, or rather victim at
this point, is still concentrating on protecting his USD $1 million he will gladly hand over a
relatively smaller sum. This time, however, the fraudster won’t simply run away, but he will claim to
the victim that he can’t begin trading due to a technical violation by the victim, resulting in the
victim’s arrangement fee being forfeited. The victim himself may be confused and unsure but will be
eventually convinced and he simply dismisses his loss to in-experience.
The only restraints are the greed of the fraudster, the intelligence and imagination of the fraudster,
and sadly the greed of the victim. In many cases, as we allude to above, it is the greed in the victim’s
heart that enables such absurd frauds to occur. That or the need and desperation of a victim, often
in dire financial straights.
All of these types of fraud will contain some sort of clincher to psychologically soften up the victim
and overcome her skepticism. For example a fraud may contain language like:
There is no risk at all as all the paperwork for this project will be done by my attorney and
with my position as the credit officer guarantees the successful execution of this project.
You should observe utmost confidentiality, and rest assured that this project would be
most profitable for both parties because I shall require your assistance to invest my share in
your country.
In other words “believe me and shut up, and I not only will you get your cut but there is a potential
for more of a cut as I use you to launder my ill gotten gains in your local economy…
We ourselves have lost money in such frauds. Often in moments of great financial need, and
feeling a general sense of optimism, that we have been exposed to some special and unique
opportunity that a benign universe brought our way. These people exploit this with ease: note in the
following example, the fraud involves warning you against a fraud.
Note well, in all of these examples, the bad grammar and deliberate misspellings. These are
deliberate, be not naïve on this point. Some examples of 419 frauds we have come across are not
only written in very good “King's English” – but their byzantine complexity displays a keen mind.
Trust us, these criminals are not illiterate. The adage “Know Thyself” comes into play at precisely,
this, point.
Deliberate misspellings are designed primarily to play into the almost unconscious stereotypes held
by many White Business-Class Westerners, Liberal or Conservative, who will generally have a certain
impression about the living situation and educational standards of third world individuals, in
particular Africans. There is no value judgment made here. We are not calling anyone racists, just
pointing out the blindingly obvious fact that we all have assumptions and presuppositions about

other parts of the world and their denizens. I certainly do. These assumptions need not be examined
because the probability of needing to do so is infinitesimally small. I need not examine my
stereotypes of village life in Burma because the probability of my landing in Burma is rather small.
However, as a mark for a scammer, be aware that your scammer has educated himself on the typical
assumptions and mindsets of people in your part of the world. Many a Western businessmen will
feel more at ease thinking that he is dealing with a well intentioned, though somewhat un-
sophisticated, and perhaps a tad bit “backwards”, individual. Dare I say, a polite and nice “coolie”? All
the while, this backwards coolie is fleecing his victim – the quite sophisticated Western businessman
- of thousands to millions of dollars.
As stated previously, on the temple of Delphi, the ancient Hellenes inscribed a single phrase “Know
thyself!”
We continue.
Based on the findings of this investigation department, we wish to warn
you against some touts. We have been informed that some touts are
contacting you in respect of the collection of your fund in the total sum
of $35 Million U.S. Dollars that was long approved in your favour through
the WEMA BANK PLC.
As a matter of fact we have been on this investigation assignments for
some time unknown to no one but the Presidency and some top government
official who are in support of this investigation team to help stop
fraudulent activities in this country.
Although we have been able to come up with some good result about the
people that have extorted money from you illegallyand i wish to list some
of them so that you will personally indicate them by writing back to us
because we want to make your payment to you without any delay but we must
surely deal and bring this names to book if only you will indicate
correctly any of them.
The names of the touts that we want to arrest are as follows:
1) PROF CHARLES SOLUDO
2) CHIEF JOSEPH SANUSI
The movie “Layer Cake” , based on the novel by J. Connolly, has an interesting sub-plot. I
recommend it highly, a typical Guy Ritchie style British Gangster film, it mixes high brow and low
brow, and paints an amusing, though quite bloody, description of certain realities of business. The
main character’s boss, Jimmy, happens to have made a blundering error of front-financing a huge
sum of money to a government in Africa in return for some commodity concessions, however he
was a victim of a bit of a scam – the “government” in question was almost entirely bogus and he lost
everything in a coup. The character’s utter desperation to recover his losses, and the machinations
that ensue, set the desperate, murderous, though somewhat humorous, pace of the rest of the
movie’s plots. At the end of the movie the narrating character learns the truth about the art of good
business – which lies in being a connector, of sorts. Which, of course, is why you are reading this
work.

Does fiction mirror life, or does life mirror fiction, or do the two subtly mold one another, in a
nuanced dance perceptible only to the discerning? The plot of the movie above is not far removed
from “real life”. The parties engaging in certain trade scams are far, let us say, heavier than you
would imagine.

4. Letter of Credit and Export Commodity Trading Frauds
Example: Variations of the fraud above are not just linked to investment schemes, but also occur in
commodity trading, import / export schemes, and so on. Here is very real example affecting would-
be Oil Brokers or Traders, the Transneft Fee Scam:
Certain Russian organized crime networks have a scam, involving advance fee,
upfront payments, of Transneft fees by buyers who wish to source crude oil from these so-called
“sellers” or “seller's mandates”.
Such “sellers”, or “seller’s mandates”, advertise heavily on online International trade
portals like Alibaba &tc. In fact, such portals are, in fact, often like ship graveyards carrying dead
deals, fraudulent products, to absurd degrees. The fraudsters generate documentation and procedures
that seems realistic enough to bluff many inexperienced would be buyers or brokers. Documentation
often contains contact information that is cleverly massaged to generate no suspicions. Cell phone
numbers presented as an office phone. Fake bank account numbers and SWIFT codes, email
addresses, and contact to a fake bank officer who is generally an individual in on the scam. Thus
phone calls and email messages sent to the seller's bank are routed to the criminals working the
scam, and not to any real bank. Some front companies are properly registered shells, but some are
entirely fictitious and do not even legally exist.
This scam is so well organized that suspicious individuals requesting authentic Transneft
documentation such as invoices for verification are put in contact with supposed Transneft officials,
even the President of Transneft itself. Of course these individuals are not whom they claim to be and
are simply other criminals who are part of the scam. They will provide an invoice for payment, and
instructions for wire contacts to Alfa Bank on behalf of Transneft pipeline. The criminals actually
have well placed plants who work inside Alfa Bank itself to divert funds to them. They also have
individuals inside Russian Standard Bank and an account supposedly linked to a Transneft
Trustee, who is really just part of the scam as well.
The Benin Import Scam: This is a real example of an Advance Fee “419” import scam originating
in the African country of Benin; unfortunately it plays on the most unfortunate situation of all
peoples – the refugee.
A company known under many names, but mostly calling itself Realmark Investment Ltd., had placed
advertisements on a number of business to business trade web sites requesting suppliers to tender offers for
export goods to Benin. They also operated under the name: “West Africa Refugees Commission (WARC)”
They offered to by goods varying from food products such as Frozen Meat, Fish, and Canned Food, to
computers and computer parts, pharmaceuticals, clothing, and the like. Attractive payment terms, such as
“70% T/T IN ADVANCE AND 30% L/C” and the fact that in most cases the organizations
affiliate claim to be purchasing for humanitarian needs, for refuges, “butters up” the supplier and engenders a
willingness to suspend judgment.
The criminals involved registered a large number of domain names and websites to perpetuate the fraud,
Sellers
replying were referred to various fictitious Benin Government agencies such as “BAFDAC” or
“BEFDAC”,

standing for “BENIN FOOD, DRUG AND COSMETIC CONTROL”, or “BENIN
ADMINISTRATIVE FOOD AND DRUGS AGENCY CONTROL”.
Of course no such ministries existed, for example (and seller due diligence would reveal this) food safety
is
regulated through Benin’s “Ministry of Agriculture (MAEP)” at: Postal Address 03 BP 2900
COTONOU –
BENIN and on the web at www.agriculture.gouv.bj
The fraudsters refer to a couple of websites: www.bafdac.such.info and www.befdacbenin.org and
www.bafdac-benin.ne1.net. Sellers further corresponding with the fraudsters are presented with various
government registration fees necessary to export their goods to Benin. Another website referred to the
“National Agency Benin Product Control Bureau” (BPCB), stated to have been established “by Decree No.
13 as amended by Food, Drugs and Related Products (Registration) Decree No. 19 of 1999 as a
Parastatal of the Ministry of Public Health,” All of this is fraudulent. A bewildering number of names,
aliases, email addresses, phone numbers, and individuals create a haze, an “ether” drugging the victim
enabling the spiders at the center of this very well organized scam to feast.
We READ a web forum in which an Italian Wine merchant confessed a transaction with a company in
Benin
wherein the Buyer requested a certificate the supplier had never heard of. The seller was asked to kindly
forward
a copy of her “CERTIFICATE OF HEALTH &AGRICULTURAL” as issued by the “Benin
Ministry of Health (BAFDAC)”
Upon the seller forwarding her copy of the BAFDAC Certificate via an email attachment the buyer
would present it to the BENIN AGENCY FOR FOOD AND DRUGS ADMINISTRATION
CONTROL (BAFDAC)”
The seller, of course, had no such certification on hand, so she requests clarification and is informed that
without
said certificate it would be impossible for her to ship the products to them.
If the seller did not have such a certificate already on file in the Benin Republic the buyer then offers to
give her
contact information for the BAFDAC, to enable the seller to contact the agency, and be issued the required
certificate, which will, of course, “enable our transaction to move smoothly without any problems”
Smoothly indeed!
Variations of the scam involved a group “Shepherd Aid Network” or SAN and procurement
director Dr. John Ndaba. SAN requests to purchase large quantities of canned food for refugees and
ask for advanced payment from the company for product registration with the “FDCA” – the
“Food and Drugs Control Agency” as well as fees for a local lawyer, or federal judge, who will
represent the supplier at the FDCA. The “West African Refugee Commission” (WARC) is another
made-up agency frequently offering to buy.

Supplier due diligence would indicate with a cursory Google search that these two commissions
only seem to be mentioned in internet forum tenders and trade leads. This indicates, at least, a need
for further research. Checking online phone directories, for starters. For example the Benin phone
directory at http://www.beninphonebook.com/en/whitepages/
All classic advance fee frauds involve persons impersonating government officials, barristers,
customs agents, and etc. Such persons lend support to the main characters in the fraud, and assist
their suckering in a buyer or seller, by requesting fees for various official documents and permits.
When you send your money, it is simply stolen. Make no mistake, sometimes these individuals are
simply not impersonating the above – on some occasions, they are indeed the real thing. This of
course adds to the drama.
Here is an example of a Letter of Credit Scams, wrapped up with a Sugar Trade Fraud. It is
also an example of a Prime Investment Bank Scam and Commodity Export Trading scam, rolled up
in one:
A sugar seller approaches you and presents you with an investment scheme. You, the buyer, will
advise a SBLC, while the Seller will use the SBLC to invest in a High Yield Investment Program involving
the trade of “Fresh-cut MTNs” and by doing this so much money will be made that he can give you a
subsidy and sell the sugar for a highly special offer of USD $100 / MT “CIF ASWP”
In the case above greed and simple tragic ignorance may cause a victim to advise payment for
1000 MT of ICUMSA Sugar at the barging price of $100 / MT for supposed delivery CIF ASWP. A
tidy net loss.
Even Transactions involving Letters of Credit are not immune to fraud. Forged shipping
documents can, and are, presented for document presentation. Many a ripped-off buyer has
discovered – to her dismay – that International Banking regulations offer very little protection for
letter of credit fraud. UCP 600, for example, is quite explicit in Article 24: That Banks assume no
liability, and no responsibility, for issues regarding the form, sufficiency, accuracy, genuineness,
falsification or legal effect of any document nor are they responsible for description, quantity,
weight, condition, quality, delivery, value, or even the existence, of the goods, services, pr modes
of performance the Letter of Credit is to pay for.
That’s right, the Bank has no responsibility for even the very existence of the goods you are paying
for. The locus of that responsibility is on your shoulder, the buyer. In Article 17: Where original
documents are to be provided, the definition of “original” can vary significantly, suffice that any
document with the word “original” printed on it whose form seems to match the nature and form
of the document that the credit calls for, is considered an “original” document, or a document with
an “apparently” original signature on it.
In all cases realize this, Article 5: “Banks deal with documents and not with goods…” and under the
mandate of UCP 600 a bank is irrevocably bound to honor a credit presented to it, or bound to
negotiate a credit if its negotiation is required, whose document presentation, as stipulated in Article
15: is “complying”. Article 14: states that the banks sole criteria to determine if a document
presentation is complying lies in examination of the documents, literally based on how they appear
on “their face”. In other words, if documents appear to be genuine on their face then the bank
honors the credit, unless clear and unambiguous evidence exists and is presented demonstrating
fraud.

Prudence dictates that a seller not allow the buyer to take possession of the goods, until he has
been paid under the terms of the L/C. If discrepancies arise in the documents this equates to a non-
complying presentation, which prevents the bank from payment of the L/C. If a buyer already
possesses the goods then he has no incentive to waive any discrepancies in the documents, allowing
the seller to fairly get paid.
Even though the bank may not pay the seller due to document discrepancy, the buyer is still under
a contractual obligation to pay for goods fairly purchased. However the sheer difficulty in further
collection gives the buyer negotiation leverage to force the price of the goods to drop substantially,
after all he already has them. The buyer may choose to not even pay at all and the seller is, thus,
defrauded. The legal and procedural costs of trying to collect payments in another country can be
costly.
More on Letter of Credit Fraud:
To reiterate, International banking rules regarding Letter of Credits only require the bank to
determine “on the face” that a transaction does not appear to be fraudulent. Even suspicion of fraud
on the part of a banker is not enough to prevent the honoring and payout of a L/C provided the
proper documentary conditions outlined in the credit are followed. The bank must irrevocably
honor the credit unless actual fraud can be proved.
Victims may be shocked when they discover they have no recourse whatsoever against the bank,
but the international banking system has very little protection against fraudulently advised
transactions. The onus of responsibility to determine if goods being paid for are authentic rests
squarely on the buyer.
Here are some examples of Letter of Credit fraud in the Sugar industry. This one found on a
Sugar Intermediary’s Website:
The Sugar Info Centre, London, Illustrates a similar fraud occurring in 1991, in which a
Bulgarian
buyer paid purchased 13,100 MT of Brazilian sugar through a DL/C for USD $3.8 million. Since,
according to UCP500, a DL/C payment will be released by an international bank on the strength
of the delivery documents presented to the bank, and these documents alone are what the bank uses
to determine the authenticity of the goods being paid for, the bank simply paid the fraudsters while
the Bulgarian buyer waited..
And waited for the arrival of the m.v. Giovanna loaded on 17th July, at Santos on the bound for
Varna, Bulgaria. Of course the sugar was non-existent and the m.v. Giovanna was renamed the m.v.
Styliani back in 1983… and scrapped in Pakistan in 1984… Simple due-diligence would have saved the
buyers. As it is, the scammers were never, ever, caught. What harmed the buyer, in the end, was greed.
The desire to pay an absurdly small below market price for his sugar was pure and simple greed.
A similar incident occurred in 1992 when a French bank paid out a USS $2.89 million DL/C from
a
Russian buyer, against delivery documents for 10,000 MT of white refined sugar loaded in Panama.
Of course, the documents were also very clever forgeries.
Issuance of a letter of credit involves an irrevocable legal undertaking on the behalf of a Bank,
at the buyer’s expense, but by the end buyer, to advise payment once the specified documentation

requested by the Credit is provided for. This documentation "proves" to the bank the commodity
being traded actually exists and that title to it is being transferred to the Beneficiary of the Credit,
such commodities are assumed to be loaded on board some manner of carriage and/or actually in
transit to the buyer’s location.
These documents are the proof of delivery, and also pass title to the goods. However if the
documents have been forged then the “proof” itself is non existent in fact. The bank is in any case
irrevocably bound to pay out on the documents the fraudster forged unless clear proof on the face
of the documents can be found of fraud.
Note that it is the bank which gives an irrevocable the undertaking, the buyer in the hands of his
bank and the seller. Any amendments - alteration to the terms of a letter of credit - must be agreed
by all parties, so the buyer is powerless if he becomes suspicious but lacks proof of fraud.
Banks deal solely in documents, not the products or services the documents embody.
The UCP 500 and 600, the ICC’s Uniform Customs and Practice for Documentary Credits, protect
the bank. These international banking rules stipulate banks must honour a credit as long as the
specified documents are presented and are correct “on their face”.
Banks do not have the obligation nor even the incentive to question deeply such the documents.
Banks have more incentive to detect forged currency notes or checks and drafts in which they bear
the losses themselves. In a credit, each bank involved will demand reimbursement back to the
buyer’s bank which will, in turn, demand and coerce payment out of the buyer.
It is legally the burden of the buyer to make her independent research and investigation.
The bank will not do it for you. For example, in the sugar fraud case above the buyer would have
had to simply checked with Lloyds Register the existence of the m.v. Giovanna, and would have
learned that it was not at the port of Santos in July 1991, rather it had been renamed the m.v. Styliani
in 1983 and scrapped in Pakistan in 1984.
BLCO – Bonny Light Crude Oil Scams
This one is easy. The Nigerian NNPC is the state owned entity responsible for a good deal of
Nigerian Petroleum Trading. The NNPC has stated that under law, they will not do business with
non-registered firms. Intermediaries can in theory do business with them but this requires
registration, financial disclosures, and approval by the Nigerian Government. Moreover, as stated on
their Web Site: “NNPC DOES NOT CONDUCT CONTRACTUAL BUSINESS BY E-
MAIL OR TELEPHONE”
Under Crude oil Marketing, the NNPC Web site states:
REQUIREMENTS FOR MARKETING CRUDE OIL
Those who wish to buy and sell Nigerian crude oil must demonstrate their
commitment to the oil industry through allocation of adequate resources of capital,
equipment and manpower to the general business of prospecting, exploration and
production of crude oil....

...who may PURCHASE NIGERIAN CRUDE OIL
A bona fide end user who owns a refinery and sales outlet.
An established and globally recognised large volume trader proof of its global
network, its operations and volumes of crude oil handled in the last three years.
Other Conditions
All applicants must have a minimum annual turnover of at least $100million and net
worth of not less than $40 million. Successful applicants must show commitment to
the development of the Nigerian economy by investing any number of opportunities
that abound either in the oil industry or gas sector. Successful companies will be required
to post a $1 million performance bond through a first class Nigerian bank in addition to
the regular crude oil contract provisions..”
Do you have the resources to place a $1 million performance bond?
If not then you can not, and will not, be able to buy/sell/trade Crude Oil directly from the NNPC –
period.
The second matter, however, is that the NNPC DOES NOT OPERATE the Bonny
Terminal. Bonny Terminal is operated by Royal Dutch Shell; the NNPC has nothing to with its
general operations, though NNPC has equity in the terminal and its products under license. Any
prominent mention of the NNPC in an offer or quote for BLCO places doubts on the offer at once.
The hard truth is: 99 times out of 100 anyone from Nigerian offering to sell you BLCO, or any
crude Oil, Jet Fuel, or any petroleum products, is a scam. And even then we would have doubts. It is
theoretically possible for an intermediary through connections to gain access to real supply, but
highly improbable and unlikely. The real allocations of such products are quickly marketed and
contracted out to fulfill existing real demand among Majors, this demand outweighs supply.
The easiest tip-off is that almost all solicitations for BLCO or any Nigerian Petroleum product
involves fantastic quantities, often more than the Monthly production of the whole country.
Another scam tip-off is Sulphur content or API, or other specific specifications of the Crude Oil
do not match Platts or other established indices. The specifications of BLCO are well known in the
industry, if the specifications on the offer you receive do not match (and it is YOU who must exert
due diligence to diligently verify such matters) then be sure it is a fake offer.
There is no company on the planet that will book a tanker for you as a private individual, for
loading at Nigeria's Bonny terminal. Scores of excited, optimistic, would be intermediaries find
themselves ever year wrapped up in silly BLCO fraud games. IF you are contacted with such an
offer you can verify it directly with the NNPC Group General Manager at +234 9 234 8237. There
is no official or easy entry to this market on a secondary level. In fact, it is so astronomically
impossible to enter this market as a non major firm on any level that you can safely regard any
BLCO offers as pure and simple myths.
Buyer's greed blinds them to doing simple due diligence, such as: what is the maximum quantity a
tanker can carry, what size tanker can the harbors in question even hold? Just these simple questions

Avoid International Trade and Investment Scams

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