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Scams Involving the Federal Reserve
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Scams Involving High Yield Investment Programs—Often Involving Private Placement Programs/Medium Term Notes For more than a decade, the Federal Reserve has been warning the public about fraudulent investment schemes that go by various names, but generically are known as High Yield Investment Programs (also known as "Private Placement Programs," "Capital Enhancement Programs," "Riskless Principal Trading Programs," "Federal Reserve Trading Programs" or "Bank Debenture Trading Programs"). These schemes continue to be used to target innocent investors. The programs purport to be highly secretive, but the marketer of the fraud scheme claims to have connections to the Federal Reserve or some other internationally renowned organization such as the United Nations, the IMF or the World Bank. The marketer claims that through these connections, members of the public can participate in very lucrative programs of investments involving various types of financial instruments, such as Medium Term Notes, standby letters of credit, and/or "prime bank" guarantees. These fraudulent "programs" are presented as legitimate investment vehicles being offered by traders or marketers with special "invitation only" access to the secret program operated by the U.S. Federal Reserve. Fraudsters claim that proceeds from the programs are slated for investment, often overseas. Fictitious letters with seemingly convincing letterhead are often used to convince targets that the programs are legitimate. Targets are told that in order to participate they must provide the fraudster with verification of large (usually multi-million dollar) deposits in a personal bank account and copies of personal information containing pictures and signature information, such as driver’s licenses or passports. The fraudsters usually give "guarantees," frequently in writing that the money will remain in the target’s account, under his or her sole control, throughout the term of the program. However, the targeted victims are often asked to sign multiple bank documents that often allow the fraudster to act as a co-signer. This authority permits the scammer to wire transfer the money out of the account, despite the guarantee never to move the funds. In other instances, the fraudster has available to him the documentation necessary to impersonate the target and take the money from the designated account. Employees of the Federal Reserve Bank of New York and the Federal Reserve System will not offer investments to the general public. Furthermore, the Federal Reserve does not authorize, license, or sanction agents or traders to deal with the general public for High Yield Investment Programs. The fraudsters market these schemes to investors in a number of ways, often describing overly complex and nonsensical transactions. Specifically, the fraudsters have been known to use some or all of the following false claims or descriptions in an attempt to enhance the credibility of the scam:
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Scam Involving Fictitious Federal Reserve Grant The Federal Reserve Bank of New York is aware of an ongoing scam that involves fraudsters claiming to be from the Federal Reserve (sometimes using the name James Carter) contacting the public through unsolicited phone calls or emails regarding a fictitious $7000 federal grant. In most instances regarding this scam, the fraudsters require the victims to wire a certain sum of money (via Western Union or Moneygram) in order to receive the fictitious grant. The victim is told this money is needed for an application fee, a charitable donation or a processing fee in order for the fictitious grant money to be released. After the victim wires these funds, the victim is contacted again and requested to wire additional money for one final fee in order to receive the fictitious grant money. Of course, the victims will never receive any grant money as this program does not exist. Please note the Federal Reserve Bank of New York is NOT involved in any federal grant program. We urge the public to remain alert to fraudulent scams involving individuals who purport to be employees of the Federal Reserve Bank of New York. The Federal Reserve Bank of New York does not maintain grant money or any other type of funds / accounts for individuals. Please remember: the Federal Reserve Bank of New York will never contact the public via unsolicited phone calls or emails asking for money or any other type of personal information. |
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Update to Scam Involving Fictitious Federal Reserve E-mail and Web Addresses
The Federal Reserve Bank of New York is aware of continuous scams that use fictitious e-mail and web addresses purporting to be official Federal Reserve addresses. In some instances, unsolicited e-mails are sent to individuals regarding fictitious lottery winnings, bogus bank accounts and/or collateral that are claimed to be at the Federal Reserve Bank of New York. In other instances, the e-mail will ask individuals to click on links to receive more information about their fictitious account or a fictitious wire transfer they sent. We strongly recommend that you do not attempt to open these links as they might contain malicious code which could infect your computer. Please remain alert to fraudulent scams involving individuals who purport to be employees of the Federal Reserve Bank of New York. Read the sections below for information on samples of various scams that have been attempted. Please note that below is an updated list of fraudulent e-mail addresses that are known to have been used in these scams. The Federal Reserve Bank of New York will never send an e-mail asking for personal information. Some addresses used in these scams include: alert@federalreserve.gov |
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Scam Involving Fictitious Federal Reserve E-mail and Web Addresses
The Federal Reserve Bank of New York is aware of many scams that use fictitious e-mail and web addresses purporting to be official Federal Reserve addresses. In some instances, unsolicited e-mails are sent to individuals from these addresses regarding fictitious bank accounts that they have at the Federal Reserve Bank of New York. In other instances, the e-mail will ask individuals to click on links to receive more information about their fictitious account or a fictitious wire transfer they sent. We strongly recommend that you do not attempt to open these links. Some addresses used in these scams include: consumerhelp@federalreserve.gov If you are contacted in an unsolicited e-mail from someone claiming to be from the Federal Reserve Bank of New York, or if you have information relating to this or any fraud please send an e-mail to report.fraud@ny.frb.org. |
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Scam Involving Fraudulent Bonded Promissory Notes (BPNs) The Federal Reserve Bank of New York has become aware of numerous attempts to present fraudulent bonded promissory notes which reference a fictitious bond account at the Federal Reserve Bank of New York. The fraudster claims to have a bond account in excess of $100,000,000 established at the Federal Reserve Bank of New York (or at another Federal Reserve Bank) upon which he or she can issue bonded promissory notes as forms of legal payment for debt. Sometimes the fraudulent bonded promissory notes are remitted as payment for debts owed by the fraudster issuing the bond, while in other cases the fraudulent bonded promissory notes are used in attempts to pay the debts of third parties. Fraudsters have attempted to use fraudulent bonded promissory notes to pay for various items including automobiles, mortgage payoffs and medical and veterinarian bills. These documents are fraudulent and will not be honored if presented. A promissory note is a form of debt similar to a loan or an IOU. An individual (investor) makes an agreement to loan money to a company in exchange for a fixed return from the company, usually principal plus annual interest. While some promissory notes are indeed legitimate, they are rarely available to the general public. If the promissory note claims to be payable through an account held at a Federal Reserve Bank, the note is fraudulent.
Sample Fraud ›› (jpg - 340 kb) If you have reason to believe you have invested in a fraudulent promissory note, you should contact your local FBI office. |
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Marco Peter Kunkel/Brandy Kelvin Advance Fee Scam It has come to the attention of the New York Fed that there is a new advance fee scam being committed using the New York Fed name. An advance fee scam is a fraud that urges a target to send a specific sum of money to a person or entity up front in order to receive a larger amount of money. Many times the fraudster asks for the target’s personal information, including bank account information, in order to send this promised larger amount of money. Release of this personal information may facilitate identity theft. The recent scam involves a fraudulent e-mail from persons purporting to be either employees or agents of the New York Fed, including Mr. Marco Peter Kunkel or Mrs. Brandy Kelvin. The e-mail informs the targets that an account has been opened in his or her name at the Federal Reserve Bank of New York and that funds have been deposited in this account. The e-mail instructs the targets to pay a surcharge in order to activate this account and access the funds that have been deposited in their name. The e-mail will sometimes provide a username and password for the target to use to access this fictitious account, as well as wiring instructions for the surcharges. The e-mail will sometimes include fraudulent Federal Reserve documents, including fictitious identification cards of employees. The fraudsters have even begun to use the names of actual Federal Reserve Bank of New York employees in this scam. The e-mail addresses used in this scam include: mr.marcopeterkunkel@nyfrbgovus.org
marcopeterkunkelfedralreserve@yahoo.com
marcopeterkunkelfedralreserve@google-mail.com These fraudsters have also created the following fraudulent website in an effort to spoof the official Federal Reserve Bank of New York site, and to facilitate their scam: See Sample Scams: Sample
Fraud 1 ›› (jpg
- 155 kb) If you are contacted in an unsolicited e-mail claiming that you have funds on deposit with the Federal Reserve Bank of New York, or have information regarding this fraud please contact Kristin Sturm or Robert Amenta in the Investigations Group at the Federal Reserve Bank of New York. They can be reached at the following |
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Scam Involving the Use of Actual Federal Reserve Bank of New York Employees’ Names in Unsolicited E-mails Please be alert to a fraudulent scam involving individuals who claim to be actual Federal Reserve Bank of New York employees in unsolicited e-mails to defraud the public. Click to see various samples of this fraudulent scheme: |
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Scam Involving Fraudulent Checks Purporting to be From a University
of Illinois Account at the Federal Reserve Bank of New York The Federal Reserve Bank of New York has recently become aware of a large number of fraudulent checks presented for processing through the Federal Reserve system. The checks purport to be from the University of Illinois and bear a Tampa, Florida address, rather than an Illinois address. These sham checks claim to be drawn on a University of Illinois account allegedly maintained at the Federal Reserve Bank of New York, routing number 021001208. These sham checks are usually made out to individuals in the United States in amounts between $3,500 and $4,800. It appears that these checks originate from overseas. In some instances the checks are received by individuals trying to sell items on eBay or craigslist. In those instances, the checks received by the sellers are in amounts exceeding the cost of the goods, with the "Purchaser" requesting that the seller remit the overage back to the buyer, less a small fee for their inconvenience. In other instances, "new employees" are solicited to engage in check cashing activities, keeping a fee and remitting the remainder via a money remitter. These checks are fraudulent. The Federal Reserve Bank of New York does not offer commercial account services of this type. Click here to see a sample of a fraudulent check. If you receive a check purporting to be from a University of Illinois account at the Federal Reserve Bank of New York or have information regarding this fraud please contact Robert Amenta, Senior Special Investigator at the Federal Reserve Bank of New York. |
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Federal Reserve Board alerts public to instances of questionable solicitations directed at consumers The Federal Reserve Board on November 4 alerted the public to instances of questionable solicitations directed at consumers. These solicitations promise consumers access to personal loans through a nonexistent Federal Reserve lending program. Under this fraudulent scheme, targeted individuals are told that that they can work through a broker to access a Federal Reserve program that extends sizable secured loans to consumers. Consumers are encouraged to deposit large sums of money into a bank account, under the guise of a security deposit, in order to receive the purported loan. The Federal Reserve is advising consumers that it has no involvement in these solicitations and does not directly sponsor consumer lending programs. The matter has been referred to the appropriate authorities for action. Consumers are strongly urged to verify the legitimacy of potential service providers before entering into a business transaction. Individuals seeking personal finance options are encouraged to do business only with reputable lenders and to shop around for the most favorable loan terms. |
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Scam
Involving Yohannes Riyadi and/or Wilfredo Saurin The Federal Reserve is aware of a fraudulent scam involving individuals using the names Yohannes Riyadi and/or Wilfredo Saurin, or persons claiming to be representatives of these two men. In a typical version of this scam, Mr. Riyadi and/or his delegates falsely claim that they have on deposit with the Federal Reserve Bank of New York several U.S. Treasury Checks issued to Mr. Riyadi amounting to billions of dollars. The Federal Reserve Bank of New York has been contacted by several brokers and financial institutions worldwide inquiring about the validity of this fraudulent account documentation, which is being offered as collateral for lines of credit or other types of asset based financing. The fraudulent scheme includes multiple documents which purport to have the signatures of various Federal Reserve officials, including Chairman Ben Bernanke. In some instances, individuals involved in this fraudulent scheme claim to have met with Federal Reserve officials and claim to have verified that the alleged account is in order. We have also learned that the fraud may include the purchase of certain documents by the introducing brokers. If you have information regarding this fraud please contact either Robert Amenta, Special Investigator at the Federal Reserve Bank of New York, or Erik Rosenblatt, Senior Special Agent at the Department of Homeland Security, Immigration and Customs Enforcement. |
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Discovered
1930s Notes and Bonds The Federal Reserve is aware of several scams involving high denomination Federal Reserve notes and bonds, often in denominations of 100 million or 500 million dollars, dating back to the 1930s, usually 1934. In each of these schemes, fraudulent instruments are claimed to be part of a long-lost supply of recently discovered Federal Reserve notes or bonds. Fraudsters often falsely claim that the purported Federal
Reserve notes or bonds that they hold are somehow very special
and are not known to the public because they are so secret.
Fraudsters have attempted to sell these worthless instruments,
or to redeem or exchange them at banks and other financial
institutions, or to secure loans or obtain lines of credit
using the fictitious instruments as collateral. It should also be noted that the largest denomination of currency ever printed by the Bureau of Engraving and Printing was the $100,000 Series 1934 Gold Certificate featuring the portrait of President Wilson. These notes were printed from December 18, 1934, through January 9, 1935, and were issued by the Treasurer of the United States to Federal Reserve Banks only against an equal amount of gold bullion held by the Treasury Department. The notes were used only for official transactions between Federal Reserve Banks and were not circulated among the general public. Fraudulent
Federal Reserve Note Schemes Below we have provided images of various fraudulent Federal Reserve Notes or Bonds
Sample
Fraud 1 ›› (jpg
- 177 kb) |
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Private
Placement Programs/High Yield Investment Programs So-called high yield investment programs or “capital enhancement programs” purport to be highly secretive, very lucrative programs of investment in various financial instruments, such as medium term notes, standby letters of credit and "prime bank" guarantees. These fraudulent “programs” are presented as legitimate investment vehicles being offered by "invitation only" by the "U.S. Federal Reserve Bank." Scam artists claim that proceeds from the programs are slated for investment, often abroad. Fictitious letters are often used to convince targets that the programs are legitimate. Targets are told that in order to participate they must provide the scam artist with verification of large (usually multi-million dollar) deposits in a personal bank account, and to provide an enlarged color copy of the signature page of the target’s passport. Scam artists give “guarantees,” frequently in writing, that the money will remain in the target’s account, under her sole control, throughout the term of the program. The purpose of these schemes is to obtain enough information about the target to allow the scam artist to impersonate the target and take the money from the designated account. Additional material and information that may be requested include a color photo, a reproducible copy of the target’s signature and other key personal information, including a passport number, a personal bank account number, routing number and SWIFT code. Employees of the Federal Reserve Bank of New York and the Federal Reserve System do not offer investments to the general public. Furthermore, the Federal Reserve does not use any agents that are authorized to deal with the general public. "Prime
Bank" and Other Financial Instrument Fraud Schemes Testimony of Herbert A. Biern: "Prime
Bank" Schemes |
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Development Investment Programs Numerous investment scams purport to "enhance assets" for project development. These scams often invoke the name of the Federal Reserve or cite Federal Reserve research. The scam artist tries to convince a would-be investor to place his funds with an asset manager, who will enhance the investment while funding various humanitarian projects, such as building bridges in developing countries. Sample Fraud ›› (jpg - 119 kb) |
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Federal
Trading Program In this scam, a target is told that the Federal Reserve uses a “Federal Trading Program” to enhance the U.S. economy. According to the scam artist’s explanatory documents, participation in the program requires proving ownership of unencumbered assets worth $100 million or more. The target is told that these assets must then be transferred to a "safe keeping account," conveniently at the target’s bank, where the target will have "complete access to [his/her] funds at all times." Once the money is in this account, the Federal Reserve purportedly assigns a "federal trading number" so that the number of trades can be monitored. The Federal Reserve also purportedly will guarantee, in writing, the rate of return. The purpose of the scheme is to obtain enough initial information about the target to allow the scam artist to impersonate him and take the money from the designated account. |
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