Introduction – Our law firm receives hundreds of queries from individuals each year who are fraud victims. This gives us an opportunity to see the latest frauds, scams and how they are being promoted. This is intended as a way for you to see that you are a victim (if you are one) and then deal with it. If we here at Panama Legal, S.A. detect a fraud in process we will tell you so immediately but we have precious little time to deal with it or you beyond that. This web page may be helpful in that regard.

Older Frauds – We think it is helpful to discuss the oldest fraud that was going around. It was common in 2005 through 2008 but has wound down now. This goes to show you the amount of mileage they can get out of such a fraud. It is the inheritance fraud. People were contacted and told that a distant relative of theirs had died in some third world country and left them a fortune. It seems that in many cases the crooks used stolen credit cards to order background investigations on the Internet to learn more about the victim and isolate real relatives who were dead. Most of the victims we spoke to said they did know about such a person who in fact was a relative. As the fraud unravels the victim needs to assist the lawyer in the third world country in getting the funds released. They come up with false documents such as money free of drug ties that requires payments. The lawyers try to get as much money out of the victim as possible. There is always another hurdle – more documents, more releases etc. requiring more money to be paid.

We have had people call us who had taken out second mortgages to pay these crooks. These victims would be calling us to set up offshore structures to receive the money. So we get calls from people who do not have enough money to buy a corporation and bank account ($1795) now but believe they are getting many millions of dollars any day now. We ask them how much money they are talking about and we would get massive figures. We do have clients with large sums but they never act like these people. We would ask these people if they have the money now and of course they would not have it. We would ask them where the money is now and under whose name and that is when the fraud was apparent. The vast majority of these people would not believe they were victims. Once in a while someone would believe us and thank us. Many of these people would persist in calling us telling us when they get the money they will buy the corporation or foundation and keep asking us about the structure, law etc. We would eventually have to tell them that if they bought the structure they would be wasting their money if their only purpose was to receive this inheritance of many millions of dollars since it was not real but to please not try to involve us in the scam as co-victims by wasting our time.

We would tell them to call when they have the money under their control. Sometimes the scammers would build a false bank website and show them the money in their account using some online banking software. When we first saw this we researched the websites and saw they were registered falsely and were a few weeks old and the banks was like 50 years old. They would file a domain name using the name of a real bank with the word online in front of it or variations like this always closely resembling a real bank. This really confused a few victims who we directed to contact the police of the country involved and ask if it was a real bank. No one ever came back and said it was a real bank. No one ever got the inheritance, not a single person. Some of these people were highly educated professionals.

The 2008-2009 Fraud of the Year – Trading programs. They come in different sizes, shapes and flavors. They can be forex, medium term bank notes, or bank instruments. Here we have people who are completely unfamiliar with Wall Street Financial Instruments thinking they are making millions and even billion trading instruments like the worlds largest banks do. If you haven’t been reading the papers the big banks employ traders who earn high six digit and even seven digit salaries to do this for them and they even lose money for the banks especially these days.

The pitch involves some special insider guy or some great contact and you can now make a fortune. Lucky you. The forex scam is the one we see a lot of. A guy who says he is a trader takes your money; say a thousand or a few thousand. He puts it in a trading program. You can’t get your money out for some time. He dummies up trading reports that show you are making massive profits. It is easy to do wait until the market closes and show them the successful trades you made during the day. Can’t lose this way. Then you are encouraged to bring in friends and relatives. You get a percentage of their trading profits as a commission. Sometimes the scammer actually pays you a small amount of money every time you bring someone in. This money comes from the referred persons investment funds. This then converts the scam to a Ponzi Scheme. So now the people feel good about bringing people in since they actually are getting some money in their hands.

Many of the scammers prefer to not do this because these payments leave a trail that can lead to their apprehension later on when it blows up. Now if you bring in 30 people you are really racking it up on paper. The dummy trading profits are massive. Now these people bring in other people and your down line is building. Then it gets time to close out the positions and take profits soon. That is when we get the calls. Oh I am going to be receiving 42 million dollars in a few weeks and I need a structure. We say oh what is the source of funds the bank wants to know this. We get vague answers. We push and then finally ask if it is a trading program. Then we ask where the money is now and they usually are not sure. Someone who really has 42 million dollars knows exactly where it is. At the end the trader either just disappears leaving everyone holding the bag or he dummies up a series of false trades showing great losses and then they think they are wiped out and less likely to chase the crooks. Usually they keep extending the trading programs for as long as the people keep bringing in new victims.

We have never ever seen a single person get any of these vast sums from these trading program scams and we have spoken to a large number of people who thought they would get rich very soon. There are real trading programs where people make modest returns on investments but these never ever purport to turn a few thousand dollars into many millions. If it is too good to be true, it is not true. The law firm has many clients who trade forex for themselves and make money at it apparently but this is entirely different. These people never trade for others. We tell the trading program people they are victims and they tend to not believe it. They say they know people who got their money out. We think they know people who said they got their money out or perhaps got small payments for referring others. They usually have no money to buy a corporation with and just want to keep asking us about the legal aspects until they get the money and then they will buy the corporation. A few actually go ahead and buy the structures before receiving the money. So again what we see is someone getting say 35 million dollars next week that doesn’t have $1795 today. We see these coming a mile a way but the victims don’t have our vantage point and it is quite sad really.

Letters of Credit Scams – These are more complex. A letter of Credit is a bank instrument usually provided to a seller of goods from a buyer to show the seller the buyer has the funds. When the seller delivers the goods as per the terms and conditions contained in the Letter of Credit, then the letter of credit becomes redeemable. We get calls from people who ask to open bank accounts with a letter of credit. We just tell them to go open the bank account with the bank that issued the letter of credit. They generally hang up or the more tenacious scammers explain why they cannot use that bank and we tell them we are not interested in trying to scam a bank and it is not going to work anyway and basically hang up on them.

The letter of credit can be a forgery. It can come from a non-existent bank with a website and phone belonging to them so they can verify it. It can be a real letter of credit and as soon as a stupid bank opens an account based on it as collateral the buyer will protest the payment of the letter based on the goods being faulty, defective, damaged or whatever. Then the bank has a letter of credit they extended credit on that is not redeemable and the bank takes a loss. Banks are not this stupid. Here we have a foreigner with no history with the bank trying to open an account with a letter of credit from a bank in another country. Come on, how stupid do they think the banks are.

These people probably buy these letters of credit for a few hundred dollars from some scam shop operator who convinces them they work along with stories of how someone ripped a bank off for many millions of dollars. The people doing this should realize that the attempts they are making could land them in jail for a long time. Another variation would be to try to get a person to invest in the letter of credit to cover some expenses and get a fantastic return on their investment.

Asset Backed Bank Accounts – This is like the buying a house with nothing down. We think this is coming out of some scammer holding seminars dealing with how to make money starting with zero capital. We never pursue these scams enough to actually see what they doing but it is obvious they are trying to pass off some financial instrument to the bank as having value and then get a line of credit against it and rip off the bank. It could be a mortgage, CD, letter of credit, bond, or something similar. We had one guy want to deposit a CD from a Swedish Credit Union, which in itself is just a scam. No bank is going to accept these instruments from a foreigner from yet a bank in a third country. If these offshore banks were as stupid as these people think, they would have been ripped off a long time ago and thus no longer have a bank.

CD’s, Bonds, Foreign Currency etc – The scam here is they have some financial instrument or cash from some third world country that is worth a fortune and need to get it into the bank. We generally get off the phone in 10 seconds with these people. A very low level scam.

Summary – If you think you are getting vast sums of money at some future date fine. From what we see the chances are less than 1 in 1,000,000. Never ever pay anything at all to the people telling you the money is coming, for any and all reasons. Avoid anything referred to as a HYIP, High Yield Investment Program. The vast majority of these are scams. Avoid commodity deals – oil, gas, fuel, gold, etc. You are not an expert in this field and do not belong there. The odds are it is a scam.

If you call us up and tell us there is money coming at a future date please be respective of our time. We cannot stay in business and devote time to people that do not have $1795 today but are going to be multi-millionaires in a few weeks. Offshore corporations and bank accounts are not for people who do not have $1795. Thank you.

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