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L/C frauds, which cost banks and practitioners millions of dollars, show no signs of letting up. In some recent developments, a British contractor pleaded guilty to conspiracy to defraud the US, the government of Iraq, JP Morgan Chase Bank and the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004.

In August 2004, APTx Vehicle Systems entered into a contract valued at over US$8.4 million to supply 51 vehicles to the Iraqi Police Authority. US officials alleged that APTx submitted fraudulent shipping documents intended to convince JP Morgan that the L/C terms had been met and the company could draw down on the L/Cs. These documents falsely and fraudulently asserted that the 51 vehicles specified on the documents had been made and were ready to ship to Iraq. The fraudulent shipping documents also listed a company as the freight carrier even though it was not and cited a fictitiously named freight forwarder. APTx agreed to pay a criminal fine of US$1 million in respect of this matter.

In Iran, the trial of dozens of people over the alleged multi-billion US dollar financial scandal in which L/Cs played a big role drew to a close. The accused, who included senior bank officials and top businessmen, had been under investigation since 2011.