A man from Massachusetts has pleaded guilty to an investment fraud that falsely promised victims huge returns from letters of credit (L/Cs).

James Massaro of Boxford, Massachusetts admitted participating in the advance fee fraud that duped at least 20 victims of more than US$6.9 million.

Initial fee

The supposed investment opportunity was touted as a foreign investment scheme operated by a business called Tracten Corporation, of which Massaro claimed to be the president.

Massaro admitted that between September 2005 and April 2008, he conspired with others to present a fraudulent scheme in which investors paid an initial fee, ostensibly to secure large L/Cs through a European financial institution.

High returns

Investors were convinced that the initial payment would secure multi-million US dollar L/Cs, which would yield high monthly returns.

Massaro admitted that he and a conspirator tried to co-opt an Italian bank into an investment scheme in 2005, but the Rome-based financial institution refused their advances.

Bogus emails

The conspirators nevertheless set up an apparently convincing web site and an email system from which they could message victims with what appeared to be legitimate investment offers from a bona fide European institution.

The emails requested advance fees from investors but instead of being invested, Massaro and his co-conspirators siphoned off the fees into their own accounts.

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