Four people have been charged in the US state of New Jersey in connection with a fraud that promised a gold dealer a valuable standby letter of credit (L/C) to fund its imports.

All four were charged with one count of conspiracy to commit wire fraud in a scheme that aimed to defraud an unnamed company out of US$1 million.

Mexican gold bonds

The fraudsters told the victims that they could obtain for their company a standby L/C backed by Mexican gold bonds.

The unnamed company wanted access to the standby L/C because the owners believed it could be used to purchase gold from other countries.

Shell company

So the company agreed to pay the fraudsters US$1 million for the supposed bank fees for the standby L/C.

The defendants made numerous verbal and written misrepresentations, including providing the victims with a phony letter from a major international bank saying it would provide a EUR 1 billion standby L/C to the defendants' shell company.

No value

But after the company transferred the US$1 million for the supposed bank fees to the defendants, they failed to provide the targeted company with a standby L/C or anything else of value.

Instead, the alleged fraudsters used the money to buy luxury cars and expensive watches, make mortgage payments on their homes and withdraw large amounts of cash.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.