A man from the US state of Virginia has been sentenced to 14 years in prison for his role in an investment fraud scheme that utilised fake letters of credit (L/Cs).

James Smith and his co-conspirators stole approximately US$5.7 million from victim investors.

Advance fee scheme

Evidence presented at trial showed that from around 2014 to 2017, Smith participated in a worldwide scheme through Chimera Group, a purported UK-based investment company.

The fraud operated as an advance-fee scheme in which the defendants acted as promoters who promised to pay the victims a sum of money at a later date in exchange for an up-front payment.

Fabricated L/Cs

Among other misrepresentations, Smith and his co-conspirators told potential victims that their principal payments would be protected by L/Cs and other documents that purported to be from a large financial institution. But these documents were fabricated.

The evidence also showed that Smith and his co-conspirators used escrow attorneys, who were themselves part of the scheme, in order to give the victims the impression that their money would remain secure until the defendants' promises had been kept.

Other sentences

Co-conspirator Stuart Anderson, a California-based escrow attorney involved in the scheme, was sentenced to four years in prison last year.

Virginia resident James Johnson was sentenced to more than eight years in prison earlier this year for his role in the fraud scheme.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.