Cons know that certain people will only invest in secure "non-stock" investments so
they tailor their scam to mimic government backed securities.
"Limited Edition" Treasury Securities
Certain foreign individuals and groups are attempting to sell fictitious Treasury
securities referred to as "Limited Edition" Treasury securities. As part of this scheme
broker-dealers and banks are being approached to act as middlemen.
The sales pitch for one scam misrepresents the way legitimate U.S. Treasuries may
be issued, bought or sold and describes the "Limited Edition" Treasury securities as:
having a term of 10 years,
yielding an annual interest rate of 6%,
requiring a minimum purchase amount of $100 million,
having an initial price of 57% of face value,
having an unspecified offering amount (available for sale until "exhausted"), and
being issued in physical (paper) form.
There is no such security as a "Limited Edition" Treasury security.
The Forms in which Marketable Treasury Securities Exist
Marketable U.S. Treasury securities only exist in three forms: (1) book-entry, (2)
bearer, and (3) registered. An overwhelming amount (99.84% of outstanding
marketable securities) exist in book-entry form which exist not as printed certificates
but rather as computer records. Since 1986, they have only issued securities in
book-entry form.
Only .14% exist in bearer form of printed certificate with interest coupons attached but
no name on it. Finally, an even smaller percentage (.02% of outstanding marketable
securities) exist in registered form with the name of the owner on it. They discontinued
the issuance of registered securities in 1986.
Scams Involving the Renting or Leasing of Treasury Securities
Cons pretend to "rent" or "lease" Treasury securities which either don't exist or are not
owned by the party making the offer.
If you ask a leasing scam artist to produce the securities or prove ownership, they
may be unable to do so and will proffer excuses such as "they are frozen at my bank;"
"a wealthy philanthropist has assigned them to us to assign to others for infrastructure
or humanitarian purposes in third world countries and wishes to remain anonymous;"
and "bank secrecy laws of this country prevent such a verification."
Misuse of Public Debt Forms as Evidence of Ownership
Scam artists often misuse forms to attempt to prove ownership or to make the scam
seem "official." They try to use the forms as "evidence" that they hold the securities
and claim that the forms can convey ownership or title to the securities listed on the
forms.
They will also use a valid CUSIP number of a Treasury security that trades regularly in
the market so a potential victim can get pricing information and confirm issue of the
security. The CUSIP number is public information and it identifies an entire issue of a
security. It does not identify any particular security, nor does mere use of it indicate
ownership.
They may claim that their fraudulent offering has been certified by an official body such
as the U.S. Embassy in London or the International Chamber of Commerce. They may
also claim that it is a special issue to the United Nations to pass on to other companies
that were willing to do humanitarian and infrastructure projects in developing countries.
U.S. Treasury Bills - One Year "Fresh Cut"
One person who represented himself to be a consultant to Lesser Developed or Third
World countries offered One Year "Fresh Cut" Treasury Bills for $500 billion which do
not exist.
"U.S. Dollar Bonds"
Fake bonds, said to have been issued in the 1930's by the CIA to help Chiang
Kai-shek fight the communists and buried in caves by his generals and their heirs for
years, have recently been "unearthed". They are now being fraudulently offered to
people at a fraction of their face value.
Most of these fictitious obligations refer to the Ministry of Finance of the United States
and the Washington Bank of America. There never was a Ministry of Finance nor a
Washington Bank of America. Many inquiries come from West Coast law firms that
are checking on the validity of these bonds for clients that reside in China, Singapore
and Taiwan.
"Federal Notes" and "Tiger Zebra" Bonds
There are even old $100 bills that have been altered to read "$100 Million Dollars" and
bogus coupons printed in a foreign language. The U.S. has never issued "Federal
Notes", "Tiger Zebra" Bonds, a security with a denomination of $100 million or a
security with coupons in a foreign language.
"De-facto" Treasury Securities
This term usually appears in offers to assign, rent or lease Treasury securities for a
fee, for a certain time period. These securities are bogus as the U.S. has never issued
any "de-facto" Treasury securities.
Philippine Victory Notes
Philippine Victory Notes, were issued in 1944 by the Philippine Government. These
currency notes were for use only in the Philippines, which at the time was a
dependency of the United States. After July 30, 1967 they were considered
de-monetized or valueless. If these notes are presented to you and purported to have
current value today, it is a scam.
Historical Bonds
Historical bonds, such as railway bonds, which were once valid obligations of
American entities but are now worthless as securities and only collected and traded as
memorabilia are quickly becoming a favorite tool of scam artists who will say that they
are "payable in gold" and "backed by the US Government". They are often used as
window dressing in prime bank schemes.
Scam artists sell historical bonds to unsophisticated investors at inflated prices far
exceeding their fair value as collectibles. They often use third-party valuations, which
state that the bonds are worth million or billions of dollars each, to do so. All of these
false assertions have been used to defraud investors into paying as much as $150,000
for historical bonds that regularly trade for $25 in collecting circles.
Criminal Desires
A Broker fraudulently marketed Certificate of Deposits (CDs) worth at least $26 million
to more than 400 mostly elderly investors by:
offering CD investments without disclosing that investor funds were being pooled
to purchase CDs that would remain in the company's name and not that of the
investors,
failing to disclose that investors would be charged 43% commissions "up front",
failing to disclose that many of the CDs purchased were "zero coupon" CDs which
would not reach maturity for 15-25 years and,
failing to disclose that the investors could not sell their interests to anyone else.
While many investors in the financial marketplace are comfortable with CDs because
they understand them to be federally insured, the investors in this case were not
buying CDs at all, but were in effect investing in CD Services, which was paying them
only a fraction of the profit it was making, charging huge undisclosed commissions and
using their money to buy CDs in its own name.
http://www.crimes-of-persuasion.com/Crimes/InPerson/MajorPerson/t-bills.htm
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