Fictitious Instrument Fraud
During the past few years, the number of fictitious instrument fraud (FIF) schemes has increased significantly. These schemes have defrauded investors out of nearly $10 billion. FIF, sometimes referred to as prime bank instrument fraud, generally occurs when criminals present fictitious financial instruments such as Federal Reserve notes, standby letters of credit, prime bank guarantees, or prime bank notes in order to fraudulently collateralize loans. Often, an individual perpetrating such a fraud seeks up-front fees, application fees, etc., to complete the transaction. Individuals, institutions, and governments worldwide have been victimized by this type of fraud.
The increasing complexity of FIF, which often uses sophisticated technology and banking terminology, makes this type of fraud difficult to identify. However, certain phrases and catchwords are used repeatedly in FIF.
Additionally, whenever the name of the Federal Reserve is invoked in an FIF scheme, it is usually done to confer legitimacy on the fraud. The Federal Reserve has issued information in the past stating specifically that it does not promote or endorse these types of transactions (press release).
For further information on FIF, you can contact the U.S. Secret Service or the Federal Bureau of Investigation .