During the past few years, there has been a significant increase in the number of reports received in connection with Prime Bank Instrument fraud schemes that has now assumed epidemic proportions. Some current estimates indicate that investors have been defrauded out of nearly ten billion dollars in the United States alone. These fraud schemes have attracted significant international attention, as individuals and organizations have lost billions of dollars throughout the world.

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

the Treasury backs or approves such programs,

the Treasury has a "secret trading room",

the Treasury must approve the humanitarian projects connected to these schemes,

Treasury securities have been purchased for investors to guarantee against any loss, and

a particular scheme has a way to pool investor funds and buy and sell Treasury securities "just like the Rockefellers can".

NONE of these assertions are true.

"Prime Bank Instrument Fraud" is the general term given to fraud schemes that go by many different names, including Prime Bank Debentures, Prime Bank Guarantees, High-Yield Trading or Roll Programs, Standby Letters of Credit, International Chamber of Commerce (ICC) 3039 or 3034 Letters of Credit, Guaranteed Bank Notes, Discounted U.S. Treasury Securities and International Monetary Fund Backed Securities. In these schemes, the fraud artists purport to have access to a secret trading program sanctioned by the Federal Reserve Bank, the Treasury Department, the World Bank, the International Chamber of Commerce or the International Monetary Fund. Claims are made that a privileged few are invited to participate in the trading of some form of bank security such as bank guarantees, notes, stocks, or debentures, which can be bought at a discount and sold at a premium. It is often claimed that there are only 5 or 7 "traders" or "master commitment holders" authorized to resell these bank securities between the top 25 or 50 world banks. By conducting these "trades" several times a year/month/day, they claim to be able to produce exceptional returns, ranging from 6% to 100% per month. Legal documents associated with these schemes often require the victim to enter into "non disclosure and non circumvention agreements" and require the invested fund be "good, clean, clear and of non-criminal origin." The purpose of these frauds is generally to encourage the victim to send money to a foreign bank, usually in the Bahamas, the Cayman Islands, or the Isle of Man, where it is eventually transferred to an offshore account that is in the control of the con artist.

These various "prime bank" trading programs or similar trading programs that offer secret, private investment markets, which purport to offer above average market returns with below market risk through the trading of bank instruments are fraudulent. Offering such programs, or claiming to be able to introduce investors to people who have access to such programs, violates numerous federal law; including criminal laws. There are no "secret" markets in which banks trade securities. Any representations to the contrary are fraudulent.

In addition, investment programs in which a financial institution is asked to write a letter, commonly referred to as a "Blocked Funds Letter", advising that funds are available in the account, that they are "clean, and of non-criminal origin" and are free of "liens or encumbrances" for a certain time frame are frequently used to perpetrate fraud schemes. These letters have no use within legitimate banking circles.

It is illegal to engage in fraud in the offer or sale of a security. Under most circumstances, it is also illegal to sell securities that have not been registered with the U.S. Securities and Exchange Commission. A security includes the following items: "note", "stock", "bond", and "debenture" as well as more general terms such as "investment contract" and "any interest or instrument commonly known as a 'security'." In the leading opinion, the Supreme Court of the United States, held that the definition of a security includes an investment contract, which is "a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third party..." Designating such instruments as "loans" does not alter their legal status as securities. SEC v. W.J. Howey Co., et. al, 328 U.S. 293, 66 S. Ct.1100, 90 L.Ed. 1244 (1946).

There are many terms that are commonly seen in documents presented by fraudsters in the course of marketing fraudulent investment schemes. Fraudsters often mimic and misuse legitimate banking terms, given that there is a legitimate and purely institutional business in which the general public cannot participate. Many of the following terms are legitimate. These genuine terms then become misused along with those that have no meaning in the real world. They are thrown together in documents that contain a mix of fact and fiction, often confusing to the na�ve investor. These include, but are not limited to:

Non-Cirumvention, Non-Disclosure
Good, Clean, Clear and of Non-Criminal Origin
Blocked Funds Investment Program
Prime Bank Trading Program
Federal Reserve Approved
Treasury Approved
Roll Programme
Irrevocable Pay Orders
Prime Bank Debentures, Notes, Guarantees, Letters of Credit,
Fresh Cut Paper
High Yield Investment Program (HYIP)
ICC 3034 or 3039 Letter of Credit
Off Balance Sheet Program

Other terms:

Prime Bank Debenture Trading,
Prime Bank Instruments, Notes, Guarantees, Trades or Letters of Credit
Prime European Bank Letters of Credit, Prime World Bank Debentures or Financial Instruments
Prime Insurance Guarantees
High Yield Debenture Trading, Financial Programs, Asset Management Programs
High Yield Investment Programs (HYIP), High Yield Promissory Notes or Bank Notes
Guaranteed Bank Notes, Intermediate Bank Notes
Roll Programs or Bank Debenture Roll Programs,
ICC (International Chamber of Commerce) 3034 or 3039 Letter of Credit
ICC 500 or 600 Bank Debenture Instruments
IMF (International Monetary Fund) Stand-by Letters of Credit
IMF Backed Securities, Bill of Exchange, Bill of Equity, or Backed Bonds
Discounted US Treasury Obligations, Renting or Leasing of Treasury Securities
Blocking of Assigned Treasury Securities, "Limited Edition" or De-Facto Treasury Securities
US Dollar Bonds, Federal Notes, Medium or Mid Term Notes or Bank Notes
Blocked Funds Letters or Investment Programs, Documentary Letters of Credit
Irrevocable Pay Orders, Collateral First Debentures, Money Center Bank
Fresh Cut Paper or Bank Debentures, Bank Paper, Seasoned Bank Debentures
Private Placement Programs, Private Trading Programs
International Certificate of Deposit (LCD), Irrevocable Bank Purchase Order (IBPO)
Irrevocable Corporate/Confirmed Purchase Order (ICPO)
Irrevocable Prime Bank Commitment, Zero Coupon L/C, Spot Trading

Common Catch Words, Phrases and Documents:

Although there are many different variations of the Prime Bank Instrument fraud scheme, most schemes include many of the following words, phrases and documents:

Other catch words and phrases that have been associated with these programs include:

Other things to look for that should make one worry:

11 Warning Signs:

1. Name dropping.
2. Buzzwords.
3. Excessive secrecy.
4. Over-reliance on authentication.
5. Excessive disclaimers.
6. Unwarranted appearance of professionalism.
7. Big player behind the scenes.
8. Yields are too high.
9. Lack of transactional basis.
10. The existence of a secondary market where these investments can be laid off quickly and profitably.
11. Flawed documentation.