Scams and Swindles



Prime Bank Investments
Characteristics of the prime bank scams include an offer to investors to be part of an exclusive international investment programme involving prime banks, including top European banks and top world banks.

The prime bank programme offer claims that investor’s funds will be used to purchase and trade prime bank financial instruments on highly confidential overseas markets, in order to generate huge returns in which the investor will share. To give this scheme an air of legitimacy, the sellers of these prime bank investments distribute documents that are complex, sophisticated and appear to be official. The sellers frequently tell potential investors that they have special access to programmes that otherwise would only be reserved for the top financial houses, including the top banks, large pension funds and other major financial institutions.

Profits are generally offered between 100% per annum and 1000% per annum return.

Features of the prime bank scams include:

  • Fictitious Financial Instruments - The prime bank financial instruments include medium term bank notes, debentures, standby letters of credit, bank guarantees. Such instruments do not exist. There are also investment programmes, which involve trading these instruments to generate large profits.

    Such programs are often called:
    • Offshore trading program.
    • A roll program.
    • High yield investment programme.
    • Or some variation of these descriptions.

  • Extreme secrecy - Promoters of the schemes insist that the investor keep strict confidentiality of all parties and people involved. They may characterise the transactions as the best kept secret in the banking industry and have said that if asked, bank and regulatory officials deny knowledge of such instruments. Investors may be asked to sign non-circumvention/nondisclosure agreements (NCND).

  • Exclusive Opportunity - Promoters frequently claim that investment opportunities of this type are by invitation only and are only available to a handful of special investors. It is explained that such investments are only reserved for the wealthy elite.

  • Complex Transactions - Normally the sellers advise that the transactions are highly complex and confidential. The parties reported to be involved in the main trades, which generate profits from which the investor would benefit, are never disclosed nor are there addresses made available for verification.

  • Extraordinarily High Returns - The carrot that is dangled for investors to participate in such investments is the incredible returns promised. These can vary from as little as 50% per annum up to 100% per annum with guarantees that these returns will carry on for many years to come.