Article

Criminal Fraud

Note: The United States Court of Appeals for the Eleventh Circuit affirmed in a Per Curiam Opinion the convictions of Robert O. Miller, Jr. (Miller), Nina Miller, and Robert Wohlleber in the U.S. District Court for the Southern District of Florida, Highsmith, J., for several offenses arising out of a fraudulent scheme involving letters of credit.

In the mid-1980s, Miller, president of FTM (a newly established subsidiary of Thrifty Corporation) applied for LCs to purchase legitimate business-related merchandise. Once FTM acquired its own line of credit with Bank of America in 1987, Miller began requesting LCs for nonexistent merchandise. Miller prepared LC applications for two companies, Sports Marketing Limited (SML) and Cactus Golf, on whose bank accounts the defendants had authority to write checks.

The court noted:

The application would represent that the company wished to sell sporting goods to FTM and that a letter of credit would enable FTM to pay for the goods. ... If the bank approved the application, it would mail a letter of credit to the seller. The seller in turn would forward the letter of credit to FTM. After receiving these letters of credit, Wohlleber or Nina Miller would create the invoices and bills of lading, evidencing the sale of (nonexistent) goods by Cactus Golf or SML to FTM, and send them on to the bank. If the bank found no discrepancies, it would disburse the requested funds by wiring them directly into the Miami bank accounts of Cactus Golf or SML

By April 1991, Bank of America had issued 195 LCs, all based on false documents to either SML or Cactus Golf. The district court approximated these LCs yielded FTM US$ 90,000,000. FTM and Thrifty, as FTM's guarantor, owed Bank of America $19,021,302 on outstanding LCs. FTM, in turn, owed Thirfty an additional $20,639,757 which represented funds Thirfty, as guarantor, had paid the bank.

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