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On this page:

How can I lose my funds if they will be in my control at all times?

How can I lose my funds if they are being exchanged for a Prime Bank Guarantee that is acceptable to my bank?


Q. How can I lose my funds if they will be in my control at all times?

A. Good question.

The only problem is that your funds will not be in your control at all times. The fraudster persuades you of this in the beginning. Once you are convinced that you will not lose your money (or that of others), you will most likely be asked to sign a POWER OF ATTORNEY authorizing the "TRADER" to either exchange your funds for financial instruments, or to leverage your funds against the purchase of financial instruments of a far greater value than you have in the account.

So what is actually happening here? Well, to begin with the fraudster now has your confidence, your belief in him and the system, your intense desire to make quick profits of fantastic value, and control over the funds in your account once you sign the Power of Attorney.

Next you will be told that your funds will not be in jeopardy because the person to whom you are assigning a Power of Attorney is authorized by the bank (by some special [nonexistent] license) to ensure that your funds will always be available to you, or that either cash or financial instruments of an equal value will exist in your account.

Finally, you will be told that if you try to access your account, it will mess up the trading and you will be in default.  You are told that you cannot call the bank or speak with any bank officer because you will blow the secrecy of the transaction and/or that you will be 'blackballed' and excluded from any further trades.

All of this gives the fraudster not only time to withdraw your funds, but transfer them far away from your account and make personal use of them.  You will be kept hanging with empty promises and empty threats.  The fraudster makes ample use of fear tactics in order to prevent you from reporting him for as long as possible.

The reality is that your funds were gone within minutes of the of the time they hit the other bank. In fact, they are deposited into one of the scammer's accounts that have nothing whatsoever to do with you.  Even an account that reads "in trust for" means nothing because your name is not on the signature card. 

The only way you have control over funds in a bank account anywhere is when you personally open the account and sign the signature card.

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Q. How can I lose my funds if they are being exchanged for a Prime Bank Guarantee on which I am the beneficiary and that is acceptable to my bank?

A. Alright, let's examine a Prime Bank Guarantee.

The word 'Prime Bank' signifies a bank in the top ten or so of creditworthiness on a global level. That is to say that the bank has exhibited an absolute minimum of defaults over a year's period as decided by a recognized independent rating agency such as Standard and Poor's.

A guarantee is at minimum a 3-party loan contract: The lender (beneficiary), the borrower, and a 3rd party (guarantor) who will pay the incurred debt if the borrower does not meet his obligation. It is the contract made when one agrees to co-sign for a friend or relative.

A bank guarantee is created when the 3rd party, the guarantor, is another bank where the borrower has established a high level of creditworthiness.

In plain English: in order to secure a guarantee from any bank, 'prime' or otherwise, the borrower must file an application with his bank.  The guarantee is approved or rejected depending on the creditworthiness of the applicant.

The borrower now has backup for his loan application and can go to another bank to obtain a loan that is usually larger than the borrower's bank can handle.

What this means precisely is that the borrower's bank is merely substituting its good name for that of its proven and qualified client. Either now or later, the borrower will have to reimburse the bank for its outlay of funds to the lender who is the beneficiary designated on the guarantee.

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Guarantees are issued in the form of an AVAL (a corporate note issued by a company whose creditworthiness is good enough for the company's bank to stamp and sign it, guaranteeing payment of the note), a LETTER OF CREDIT or a any financial credit instrument used in international trade, a mortgage, a car loan, a business loan, or any financial instrument that a bank issues under the conditions stated above.

Additionally, guarantees require a great deal of paperwork both before and after they are issued.

Now you have to ask yourself - exactly how is the so-called Trader going to obtain a bank guarantee on which you are the beneficiary, i.e. the lender, and  whose loan are you supposedly guaranteeing?  Remember, the lender only benefits if the loan is repaid in full plus interest.

Well, if you ask that same question of the scammer you will be given a mishmash of disinformation about buying at guarantees at discount, making them "seasoned" and selling them on the secondary market.  Sorry, buying financial instruments at discount is called FACTORING, and the SECONDARY MARKET has nothing to do with your benefit.    

No matter how many different scenarios I present to you, and there are many involving factoring and discounts misrepresented by the scammer, the bottom line remains the same - your funds are going one way, and you are going another.

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Based on the above information, how does the 'Trader' propose to exchange your funds for a guarantee that is acceptable to your bank???

He won't be able to do this at all because there's no guarantee to begin with. 

There will be plenty of excuses, like your bank is not adequate to the task and another bank will be have to be used; the Trader is sick and couldn't complete the transaction; the Trader had other, more important business to attend to; his mother is in surgery; political unrest in (pick a spot) is causing delays; it's too late in the year and trading has stopped until the middle of January; and on and on. 

Truth is, the proposal is merely scamspeak.  The scammer is using all sorts of mumbo-jumbo financial lingo to say that he wants your money to buy you a check on which you are the payee.  Only problem is, your money only goes toward the scammer's new car and enough gasoline to get out of town.


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