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.
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.
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)
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
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.
Scams by Persons Claiming to be Federal Reserve Personnel Seeking Account Information
The Federal Reserve Bank of New York is aware of a scam by persons claiming to be Federal Reserve “security department” personnel seeking “account” information by e-mail. This message is not sent by or on behalf of the Federal Reserve Bank of New York. The e-mail’s attachment contains a virus and should not be opened.
Sample Fraud (gif - 20 kb)
Federal Reserve Checks
The Federal Reserve Bank of New York receives many inquiries about promissory notes and checks purportedly payable by the Federal Reserve Bank of New York.
One type of inquiry involves checks that are purportedly drawn against accounts maintained at the Federal Reserve Bank of New York by various institutions and individuals—typically foreign central banks. Although foreign central banks do maintain accounts at the Federal Reserve Bank of New York, they do not have check writing privileges on those accounts.
Special Invitation Federal Reserve Websites
The Federal Reserve Bank of New York is aware of a scam involving the use of websites that purport to be official Federal Reserve websites. The sites look similar to the official Federal Reserve Bank of New York website and may use Federal Reserve trademarks and logos.
These fraudulent sites may indicate that the site is a "special invitation website." The sites may ask an Internet user to enter an "invitation code and pin" to access his personal account page or check the status of his foreign payments.
The Federal Reserve Bank of New York and the Federal Reserve System do not offer investments or payment services to the general public, nor do they use any agents that are authorized to deal with the general public.
Sample Fraud (jpg - 35 kb)
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)
Various Nigerian 4-1-9 Scams
Several financial frauds and scams originate in Nigeria and are commonly called "4-1-9" after the relevant section of the Nigerian Penal Code. Some, but not all, invoke the name of the Federal Reserve. All of these scams are fraudulent.
See also: Nigerian Funds Placement Schemes