BiggerPockets

Since several thread appeared (and disappeared) here on BP offering seemingly too-good-to-be-true funding, I thought I would add this topic.

This thread discusses the long-lived prime bank note scam

http://investorswatchdog.com/blog/investorswatchblog/?p=876

from the article:

Prime bank scams usually claim that there is a "trading platform" for certain bank instruments in Europe to which only the most sophisticated investors have access. The promoters claim that they have access to a trader on that platform and that he can buy instruments (often bank guarantees, debentures, or medium term notes) at a discount to face value and simultaneously sell them at face value to a buyer who has already been identified. Of course, the scheme makes no economic sense. Plus, there is no such trading platform.

If you have more interest in this topic you could also simply input the term "Medium Term Note" and "scam" into a search enging ane read to your heart's content. I especially recommend posts on government website sec.gov, ftc.gov and any of the Fed's websites

Whenever I see a message that includes Medium Term Notes or MTNs .. a very large red flag flies.

They could, but some people spend the bulk of their lives trying to figure out how to steal from others. Unfortunately a bunch of these idiots travel in the real estate circles!

I see these scams being offered all the time. Unfortunately, there is a pool of borrowers who are so desperate for funds that enough of them bite on these scams to keep them alive. Almost always, they loose a large sum of money. Too bad, if they only did their DD they would most certainly be able to save themselves future grief.

However, some of these scams are based on a thread of truth. A person can certainly monetize a BG, SBLC, CD, etc. with little problem IF the transaction is real.

The problem lies in brokers/intermediaries who try to put these instruments into a borrower's hands often by leasing them. The fees to do so are often exorbitant, and from what I've seen, these transactions always fall apart.

Often times, the "provider" will provide a front copy of say an SBLC, but what really matters is the back copy. That is where a bank can verify who the actual owner of the instrument is. If the names on the front and back copy don't match, no bank is going to monetize the instrument. If the names match, it is a simple transaction, but if a person could obtain a 50MM SBLC from HSBC then they are in a different league then most and certainly don't need a broker to help them.

My personal favorite is the trading platform scams. Not only are the returns off the wall ridiculous, but it is impossible to verify references since they all hide behind privacy laws.

I look at it this way. If trading platforms could provide the returns they claim, wouldn't it be safe to assume that Warren Buffet wouldn't be investing in stocks??

I'm glad you did that Mitch because the prince then had enough money to buy my ocean front property located in Las Vegas I sold him! Cha Ching for me.