Prime Bank Instrument Investment Scheme

The use of official-sounding terms, such as Prime Bank Notes or Debentures, or Roll-over Programs, typically take the form of banknotes, debentures, letters of credit, bank purchase orders, zero coupon bonds, or guarantees.

The word “Prime” is meant to refer, generically, to reputable financial institutions (example: world banks) who supposedly issue these investments. These schemes sometimes claim affiliations with major international organizations, like the International Chamber of Commerce (ICC) and International Monetary Fund (IMF). Both the IMF and ICC deny any association with these types of international investment programs.

Persons promoting these schemes lead prospective investors to believe they are being invited to participate in an otherwise secret trading regime. Investors might be required to sign non-disclosure and non-circumvention agreements which prevent them from disclosing to any persons the identity of the parties involved in the investment programs and the terms of the transactions.

One or some of the following items characterize the schemes:

• (1) Often, some part of the schemes would be transacted through a country regarded as a secrecy haven. This "offshore secrecy" feature conceivably enables investors to avoid paying any taxes on proposed investment returns.
• (2) The scams are characterized by promises made to investors of  above-average returns or guarantees of unrealistic rates of return, within a short period of time (e.g. 20% return per month), completely risk free.
• (3) Legal-looking documents that often use technical language in an attempt to confuse investors into believing their investments are worthwhile. They may make reference to trading programs like “forfeiting program”, “high yield cash trading program”, and “high yield investment program” (HYIP).
• (4) Little or no information is provided to the investors about the specifics of the prospective trading programs utilized (example: how investors’ returns are generated).
• (5) Monetary rewards provided to investors already involved in the schemes to encourage them to induce others to invest. Many individuals brought into these schemes are relatives or friends of the initial investors and, as such, are less skeptical of the investments because they trust the family members/friends who made the referrals.

Tips

• The Ontario Securities Commission and the RCMP would like to remind investors to rely on the basic principle of investing: “If it sounds too good to be true, it probably is!”
• Anyone solicited to invest in a “Prime Bank” investment scheme or anyone having information pertaining to this or a similar scheme, should contact the Commercial Crime Section of their local RCMP division and the Ontario Securities Commission or their local securities regulatory authority.

Links

• ABC's of Fraud - Online Fraud Quiz