A US federal grand jury has now indicted two District of Columbia residents on fraud charges related to a case that allegedly employed bogus standby letters of credit (L/Cs) to defraud investors.

Sylvester Mitchell was named as a co-defendant with Daryl Brown in the case centring on the District of Columbia based Vertical Group, which the two men are accused of using as a vehicle to defraud investors out of at least US$900,000.

Mega profits

The latest indictment accuses both defendants of misrepresenting their educational qualifications and business credentials to lure investors into buying standby L/Cs by promising that these instruments would yield a 20 per cent profit after 30 days and another 20 per cent profit every week thereafter.

According to the prosecution, none of the investors saw any such returns.

Charges

Charges on 12 counts of fraud and money laundering have already been filed against Brown, who was arrested in September 2005. Mitchell received his first indictment this month.

Brown has been accused of 12 counts of wire and travel fraud and conspiracy to commit money laundering.

Sentences

According to prosecutors in this case, the two men defrauded US investors and others as far afield as Australia and South Korea.

If convicted, the defendants face prison terms of up to 20 years and fines of up to US$250,000, or both.

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