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Cheque Frauds

 

There are a number of different cheque frauds.  One of the most common, however, is linked in with a high interest investment/bankroll/bank debenture type fraud. 

 

An individual is approached to make an investment of, say, $5million.  He is persuaded that the monies should be held in a project account pending finalization of the authorities in the deal.  The project is called, for example, Smith.  The explanation for this would be that it is anonymous.

 

The fraudsters then in order to assist and help the investor make arrangements to open a project account entitled Smith in a different jurisdiction.  The investor is then encouraged to make a Swift transfer of some millions of dollars to this account.  The transfer takes place.  Much to everyone’s surprise there is in fact a Mr or Mrs Smith who then goes to the bank, makes it clear that they are the owner of the account and they then arrange for a Swift transfer or to withdraw a bankers draft for the millions that have been deposited.  They then take those monies to another bank where they have persuaded bankers to open an account and credit them. 

 

The beauty of this system, from the fraudsters’ point of view, is that it allows them to have total control of the money from the moment it arrives in the project account and also allows them to move the money into another bank account, thereby effectively laundering it for further use.

 

In our experience the way to deal with these matters is to encourage the project account holding bank to declare there to have been a fraud and to refuse to honour the bankers draft.  That persuasion, particularly in Switzerland and other serious banking jurisdictions, takes some considerable skill.  Once, however, a declaration has been made that the paying banker believes there is a fraud, then there will be worldwide cooperation from other respectable bankers on the fraudulent document.

 

Inevitably there will be subsequent litigation concerning the dishonouring of the fraud, recoupment of monies, and possibly penal proceedings.