Table of Contents:
- “CUSIPs R US – Phantom Loan Collateral” Article by Joe H. Dickerson, CFE
- Cheesy Chicken & Rice Bake Recipe
- “Learn to Say Yes or No” Short Story
- Buy “Diagnostic & Prescriptive Judgment Enforcement” Book By International Best Seller Author, Joe Dickerson, CFE,
- “What Clients Say” About Financial Forensic Services
CUSIPs R US
PHANTOM LOAN COLLATERAL
By: Joe H. Dickerson, CFE
Do you want or need to get a significant commercial loan from your bank or other lender? Does the lender require more collateral than you have available? Would they accept good securities (stocks or bonds) to collateralize the loan?
Well, there’s “good news”! If you are so inclined, you can rent the securities complete with CUSIP numbers for verification. (CUSIP is an acronym for the Committee on Uniform Securities Identification Procedures). Each security issue (stocks, corporate, municipal, or treasury security) bears a unique CUSIP number assigned.
The fraud works this way: you rent or lease the securities so you can “enhance” your assets in order to obtain a loan or business deal that you could not have otherwise obtained by claiming these non-existent securities as your own assets. They are listed on your financial statement to enhance your net worth and/or you actually pledge them as collateral for your loan. Either way, this activity is fraudulent, whether or not the securities do, in fact, exist. The scam artists use a valid CUSIP number of a security that trades regularly in the market so you or your lender can get pricing information and confirm that the security was issued.
The scam artists offering these securities for rent cannot produce them upon request. You will hear such excuses as “they are frozen at my bank;” “they are scattered in banks all over the world and would be too difficult to produce;” and “bank secrecy laws prevent such verification.”
Some of the offers to lease Treasury securities involve the use of real Public Debt forms to make the scam seem “official.” The two forms that are commonly used are: PD F1832-Special Form of Assignment for US Registered Definitive Securities, used only by the Bureau of Public Debt and the Federal Reserve Banks; and PD F1071-Certificate of Ownership of United States Bearer Securities, used to validate the ownership of bearer notes and bonds that are presented for redemption more than one year after maturity. In all cases, the forms are not valid unless the registered securities actually accompany the forms.
Scam artists use these forms as “evidence” that they hold the securities and that the forms can convey ownership or title to the securities listed on the forms.
Beware if you lease or rent securities, as you may be the victim of fraud. If you use these securities to “enhance” your financial statement to get a loan, or if you pledge these securities as collateral for a loan, you may be committing, or at least participating in, fraud. If you personally, your bank, or your company has accepted as collateral securities that you believe to be rented or leased, you may be the real victim of a major fraud. Remember— Due Diligence is Good Business!
Copyright all rights reserved. Financial Forensic Services, LLC 2020 Brief quotation with attribution permitted.
LEARN TO SAY YES OR NO
Good negotiators understand that talking too much is a sign of insecurity and weakness. Sometimes the most potent word in any language is a simple yes or no., without further explanation or elaboration. Most decisions eventually come to that point. In order to do that, you must be able to answer these three questions: (1) Is this decision mine alone to make? If you are the sole decision maker or the final decision maker, don’t hesitate and don’t vacillate, make the decision. And before you do, stand on this Scripture: “If any of you lacks wisdom, let him ask God, who gives to all liberally and without reproach, and it will be given to him.” (2) What will happen if I put off making this decision? In most cases, things will either get better or worse for one or more party. So weigh your decision carefully, realizing that it is likely to lean in favor of the heavier weight of the argument, then decide. At this point, stand on the Scripture: “Trust in the Lord with all your heart, and lean not on your own understanding; in all your ways acknowledge Him, and He shall direct your paths.” (3) Does every decision have a moral and spiritual dimension? When you compromise your convictions or character for popularity or profit, you end up morally and spiritually bankrupt. So hold your values and base your decisions on them.
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