Proof of funds: Difference between revisions
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The terms "standby letter of credit" and "blocked funds letter" are also used. |
The terms "standby letter of credit" and "blocked funds letter" are also used. |
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This is a form of deception and may constitute fraud. |
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== Fraud vehicle == |
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Leased proof of funds letters have been associated with [[real estate]] fraud. [[The Wall Street Journal]] reported that "the U.S. Attorney's office in Brooklyn said persons who were looking to temporarily lease funds in order to enhance their creditworthiness when applying for loans were instead provided with false proof-of-funds letters on bank stationary showing the funds had been deposited in their accounts."<ref> |
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{{cite news | |
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url=http://online.wsj.com/article/BT-CO-20090331-720248.html | |
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title=DOJ: Nine Persons Arrested In $7M Leased-Funds Scheme | |
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publisher=The Wall Street Journal | |
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date=March 31, 2009 | |
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author=Bray, Chad }}</ref> |
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The [[FBI]] advises criminal investigators that |
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"investment programs in which a financial institution is asked to write a letter, commonly referred to as a "blocked funds letter," advising that funds are available in the account, that they are "clean and of noncriminal origin" and are free of "liens or encumbrances" for a certain time frame are used frequently to perpetrate fraud schemes. These letters have no use within legitimate banking circles."<ref>{{cite news | |
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url=http://www.fbi.gov/publications/leb/2001/may01leb.pdf | |
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title=Investment Fraud | |
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publisher=FBI Law Enforcement Bulletin | |
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author=Cauthen, John | |
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date=May 2001 | |
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}}</ref> |
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== See also == |
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* [[False pretenses]] Related [[Crime|criminal offense]]. |
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== References == |
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<references/> |
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{{investment-stub}} |
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{{business-term-stub}} |
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Revision as of 07:54, 24 May 2010
A proof of funds is a statement by a bank or financial institution that a depositor has a certain amount on deposit.
Leased proof of funds
A proof of funds is sometimes a 'leased' Proof of Funds, whereby a client pays a fee for monies to be deposited into their personal or business bank account, and the money is 'blocked' by the bank, thereby allowing the client to show money in their account, but that client is not permitted to withdraw the money deposited by the investor.
The terms "standby letter of credit" and "blocked funds letter" are also used.