The US Securities and Exchange Commission (SEC) says an ex-Federal Bureau of Investigation (FBI) agent helped a businessman perpetrate a US$2.1 million fraudulent prime bank investment scheme in which investors' funds were supposedly backed by bank guarantees and standby letters of credit (L/Cs).

Investors were promised a high return on their money in a short space of time.

Escrow services

The SEC says in a court filing that former FBI agent Jayat Kanetkar was engaged by businessman Peter Baker to run background checks on the latter's business, Prestige Global Trading.

The businessman subsequently asked Kanetkar to provide escrow services for fraudulent prime bank investments that Baker offered to investors.

Investors duped

Baker told Kanetkar that he and his partner, Elizabeth Oharriz, who acted through her company, Diversified Initiatives Consulting and Logistics, had access to prime bank instruments, such as bank guarantees and standby L/Cs.

Investors were told by Baker that they could purchase the bank instruments for a small advance fee and then earn astronomical profits in just a few months with little or no risk.

Kanetkar agreed to provide escrow services for Baker and Prestige despite not understanding the transactions or how small advance fees could generate such vast profits in so little time and with little or no risk.

Big investments

In 2016, a new Costa Rica based investor, Gestion Austral Los Pinos, put US$543,125 into the account. When this investor questioned the alleged fraudsters about its investment, the defendants produced a fraudulent document that apparently showed that a standby L/C had been obtained.

The largest single payment to the escrow account appears to be the US$728,500 put in by a Californian investor who thought his money was invested in a real estate scheme.

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