Fraud Alert: July 10, 2018

July 10, 2018

The Law Society has become aware of a potentially fraudulent scheme that may involve the purported sale or redemption of historical bonds for a large amount of money, or the chance to invest or participate in such a transaction. Bonds used in this kind of scheme have included Chinese, “Super Petchili,” Napoleonic, Mexican and railway bonds.

Lawyers may be targeted by being asked to certify documents, take possession of bonds, prepare contracts, or receive funds into trust.

The fraud may also involve one or more of the following:

• A contract referring to a lawyer or other trusted party as an intermediary or as being in possession of a bond;
• A requirement of complete confidentiality;
• References to trading programs;
• Documents that refer to the International Chamber of Commerce (ICC) or the International Monetary Fund (IMF) or include legal-sounding terms, such as:
  • “purchase participation contract”
  • “non-circumvention/non-disclosure”
  • “exit-buyer”
  • “full legal and corporate responsibility”
  • “table top closing”

The bonds used in the scheme may or may not be real. They are generally worthless as financial documents and might have value only as collectors' items. People who are targets or dupes in the scheme may be led to believe that a sale or trade of the bond for a large amount of money is pending, and they may be asked to pay money in order to participate in a transaction which is entirely fictitious.

Lawyers are encouraged to be vigilant.  

For more information on fraudulent schemes, including the red flags of fraud and questions to ask, you may access further reading under fraudulent investment schemes or contact Practice Advisor Barbara Buchanan, QC for advice.