Fraud victim advocacy, fraud recoginition and prevention education, and law enforcement support

fraud recognition & prevention education, fraud victim advocacy, law enforcement support

Fraud recognition & prevention education, fraud victim advocacy, law enforcement support


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 about Letters of Intent (LOI), Proof of Funds (POI), and meeting the Trader

Warning: In High-Yield Investment Program Fraud, your money is never invested in anything.  It is stolen the moment you transfer it from your home account to the fraudster side.


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On this page:

  1. Why am I being asked for a Letter of Intent (LOI)?

  2. Why do I have to provide proof of funds before anyone will tell me the details of the investment?

  3. Won't a personal introduction to the Trader prove that the investment is valid?

Q. Why am I being asked for a Letter of Intent (LOI)?

A. A Letter of Intent is merely a document written by one business entity to another stating a willingness to do business. It is not binding unless specifically agreed upon by both parties within the letter, but it is best to consult an attorney before signing one. A Letter of Intent specifies that you have an intention to do business, not that you necessarily will.

So what's the point?

The point is that it is the first step in establishing who is in control. Right off the bat, you are being asked to make a written commitment. You probably have questions about the investment, but are being told that you will not receive any answers without this document. This immediately puts you in a secondary position. You are now the supplicant and have empowered the fraudster, at least psychologically. It is a brainwashing technique, used to make sure you understand who is calling the shots. You have also just given him your address and telephone number, fax number, and whatever other numbers he may have stated are required.

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Q. Why do I have to provide proof of funds before anyone will tell me the details of the investment?

A. First off, the fraudster wants to make sure he isn't wasting his time. He will tell you that the 'Trader' wants to be certain that he is dealing with a real investor, not just an intermediary. Using a certain amount of intimidation, he will make you feel that you must prove your capability so that you will be taken seriously.

So, once you have given him proof of funds, he is secure in the fact that there are assets to steal. Additionally, you have provided him with the name of your bank, and maybe even an account number.

In the process of providing reasons for proof offunds, the fraudsters has emphasized the secrecy of the investment system. This allows him to exert control over you. An aura of secrecy is a great control tool because it automatically places you in a weaker position.

Lastly, by repeatedly placing you in a weaker position, he has gained control over the amount of knowledge you are allowed to have, and the amount of consideration you will give to his answers. He can cloak the answer to any of your questions with a 'need to know' limitation.

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Q. Won't a personal introduction to the Trader prove that the investment is valid?

A. Not really. I mean, think about it. What validations will the Trader bring with him? Will he show you his licenses and authorizations that you can verify independently or will he want you to take his word for his claims? Maybe you will be shown fax copies of alleged transactions. These are a dime a dozen. Unless you handle bank documents every day in an official capacity, you are at the mercy of the fraudster and his explanations. On the other hand, you may be shown originals of inter-bank transmissions. These are easy come-by as well and do not mean a thing.

By the time the fraudster agrees to introduce you to the so-called Trader, you have been rigorously prepared. You have been told that this is a privilege awarded to the lucky few; that the 'Trader' does not waste his time with just anyone. You have been persuaded that you are extra-extra special. This is a very effective form of brainwashing used by fraudsters and it works because everyone wants to feel special, never mind extra-extra.

It is important to keep in mind the fact that a strong desire to believe is like self-hypnosis: you can literally program yourself to ignore the warning signs, even when they are right in front of you. The fraudster counts very heavily on this.

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