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Letters of Credit Fraud

Letters of credit are issued by banks to ensure that payment is made for goods being shipped internationally. Before a letter of credit can be paid, the bank making the payment must receive documentation certifying that the goods ordered have been shipped. Unfortunately, many people unwittingly become involved in letter of credit fraud schemes, which can result in prison time and the payment of heavy fines, so if you are a resident of south Florida and are being investigated for fraudulent activity in connection with a letter of credit, you should speak with an experienced white collar crime attorney who can explain your legal options.

State Law

Florida law defines a letter of credit as a definite undertaking by an issuer to a beneficiary to honor a documentary presentation by payment or delivery of an item. Letters of credit can be divided into two main categories. The first is known as a commercial letter of credit and is the traditional type of document used by banks and other financial institutions. With these types of documents, as long as the transaction goes as planned, the beneficiary will be paid upon presentation of the letter. The second category of letter is known as a standby letter of credit and is used in situations where the parties anticipate that using the document will not be necessary unless something goes awry with the transaction. For example, if a standby letter of credit was issued to a business that leased construction equipment, it may specifically state that the lessor could draw on the letter of credit by presenting a certificate stating that there was a default in the transaction.

Legitimate letters of credit are never offered as investments or sold, but must be issued by a bank. Charges of a fraudulent scheme regarding letters of credit usually involve allegations of providing a bank with false documentation to show that goods were shipped when they were not, or when the goods shipped were inferior, or are somehow different than what was ordered. Someone charged with letters of credit fraud may also be accused of offering these documents to someone else who, in return for the letters, invests a sum of money and is promised enormous returns with little to no risk.

Someone who is found guilty of letters of credit fraud may be required to pay damages to the plaintiff, in addition to attorney’s fees, and interest. Defendants also face jail time and fines, so if you have been accused of fraud, it is critical to consult with an experienced white collar crime attorney as soon as possible.

Call an Experienced South Florida White Collar Crime Attorney Today

To speak with a dedicated white collar crime lawyer about your own case, please contact Jeffrey S. Weiner, P.A., Criminal Defense Attorneys in Miami at (305) 670-9919. A member or our legal team can also be reached via live chat or by filling out one of our contact forms. Please contact us to schedule a free consultation today.

Resources:

sec.gov/oiea/investor-alerts-bulletins/ia_primebankscam.html

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0675/0675.html

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