Samuel Abraham, a resident of the US state of Michigan, has been sentenced to 10 years in prison for his roles in running an advanced fee scheme involving fake standby letters of credit (L/Cs).

His co-defendant Kenneth Thomas, who is also from Michigan, is expected to be given a lighter sentence for his role in fraudulently obtaining some US$1.2 million from victims resident in several US states, Peru, Australia and other locations.

Investors misled

Investors were duped into lodging deposits of approximately US$150,000 each in an escrow account controlled by Abraham but operating as Advanced Funding Group.

Abraham, who used several aliases, claimed that he could use those deposits as collateral to 'lease' standby L/Cs from a European Bank with a 'face value' of approximately US$100 million.

Lucrative investments

Of this large sum, clients were promised they could simply keep approximately US$20 million as a 'non-recourse loan' while a so-called 'monetiser' would then invest the remainder of the funds over the course of the year-long duration of the standby L/C in lucrative overseas trades.

These trades would supposedly generate profits sufficient to repay the entire standby L/C.

Victims duped

Clients were duped into believing they had wired money to an escrow account associated with the scheme but in reality they were paid into accounts of Abraham's chauffeur, Kenneth Thomas.

Abraham meanwhile spent large sums of investors' money gambling at casinos and on vehicles and a condominium.

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