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Prime bank scams

Gorgeous story:

22. In 2004, Defendants pursued funding through a transaction in which, in exchange for an advance fee of $200,000, FiberPoP was to receive at least $20 million. Defendants never received this funding.

23. In 2012, Defendants provided an advanced fee of $10,000 to “Vital Funds, Inc.,” ostensibly toward a two-year lease of a $33 million stand by letter of credit. The individuals involved with Vital Funds, Inc. were found guilty of prime bank scheme-related criminal charges in April 2015 in U.S. v. Holland et al., 3:14-cr-73 (M.D. Fla 2014).

24. In June 2013, Defendants deposited $500,000 into an escrow account as a deposit for a $35 Million stand by letter of credit. The individual with whom they deposited the funds emptied the escrow and was indicted for conducting a prime bank scheme.

25. In 2013, Defendants entered into an agreement with Worldwide Funding III wherein they deposited an advanced fee of $90,000 into an escrow account, purportedly in exchange for a €10 million financial instrument. This instrument was then supposed to be placed into a trading account for FiberPoP’s benefit. The escrow account was emptied in September 2013, and Defendants never received the €10 million financial instrument.

So, little company, lying through their teeth to get investment. Which they then blow on a never ending series of frauds upon themselves.

Just nutso.

But sadly, I know someone like this. Years back I was asked to sit in on a meeting where he was offered participation in the Prime Bank Guarantee scheme. After the meeting I said, it’s a scam, they don’t exist, there’s nothing to this, DO NOT PUT ANY MONEY IN.

He did and he lost it of course. Strangely, that meant that when he was offered another such scheme he didn’t ask me and still invested and lost more.

Some people just won’t be told.

10 thoughts on “Prime bank scams”

  1. Genuinely very amusing. Feel a wee bit sorry for the original investors in FiberPoP though, ultimately there are some non-scammers who put the cash up. (Founded 2001 apparently, still no operations or staff or revenue but the odd thing is a rather clunky website, redesigned 2012, clearly targeted at potential customers rather than directly appealing for more investors. Maybe that’s just for a veneer of credibility when some poor sod does want to put cash up.)

  2. Alan Sugar on football (and associated “business people”):
    “I can cope with crooks and I can cope with idiots. But I struggle with idiots who think they’re crooks.”

    (From memory E&OE)

  3. “Some people just won’t be told”.

    Yes. I once knew a tax accountant who told me there were many people like this. He’s tell them over and over that they were investing in scams and they just kept putting money in.

    I think they were just convinced in their own minds that they’d be rich one day, and they thought he was just getting in the way of that happening.

  4. One of the wonders of capitalism and free markets is that they generate so much wealth that great chunks of it pass to people who haven’t a clue about money. They then get robbed. It would be funny except that as we age many of us will join that category. Or our widows will.

  5. It’s a good thing that a fool and his money are easily parted. We need money to go from stupid ideas to good ones with as little friction as possible.

  6. There’s a few lines in that article:
    “A few weeks ago I said that the financial industry is “built on the dream of making money for nothing, of arbitrage, of perpetual motion machines, of converting intellect into cash without the annoying interventions of hard work and risk.”
    Fair do’s. If you can find a way of turning YOUR intellect into cash, good luck to you. But if someone comes to you, who have no intellect, with a scheme to turn your cash into more cash, using their intellect, be aware that YOU maybe the way they’re tuning their intellect into cash. For, otherwise, why would they need you?

  7. Ahh yes reminds of the first time I came across the Nigerian 419 type scam, fax machine of course as it was pre-email being common.
    Boss and his wife thought it was interesting and worth following up, I pointed out it was clearly a scam of some sort. When it comes to frauds it’s amazing how the same old schemes keep working, there really is one born every minute

  8. There’s one born every minute.
    So you might expect a new type of fraud to come along every once in a while.
    But no, they are all derivatives or variants of scams that have been around as long as greek myths.

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