Dictionary of Financial Scam Terms: Infrastructure Loans

Infrastructure Loans

Truth:

Infrastructure is 1 : the underlying foundation or basic framework (as of a system or organization); 2 : the permanent installations required for military purposes; 3 : the system of public works of a country, state, or region; also : the resources (as personnel, buildings, or equipment) required for an activity Merriam-Webster's Collegiate® Dictionary & Thesaurus

An infrastructure loan is specifically designed to finance construction of public schools, public housing, roads, dams, electric facilities, etc. as shown in definition 3 above. Infrastructure loans on a global or domestic level are often underwritten by the financial strength of a local government or a foreign government, or through the auspices of the WORLD BANK and other international financial institutions. This means that while the loan funds actually come from ABC Bank or a combination of banks, the loan itself is guaranteed by another financial institution such as the World Bank.

Infrastructure loans are very complicated affairs, taking weeks, months, or even years to put together. All variables, benefits, drawbacks, and possibilities have to considered with an eye toward a successful outcome despite unforeseen events.

Scam:

The existence of such loans provides an excellent opportunity for our swindler. He can now convince his mark that not only can enormous amounts of money be made, but that an entire nation can benefit from the mark's charitable contributions. The contributions are a portion of the profits the mark will earn as a result of his investment into a program supported by major world banks. The program has been devised by major world banks as a means of acquiring funds to loan to underdeveloped countries for the specific purpose of improving their infrastructure. Once this has been said, the mark is not encouraged to delve too deeply into the specifics of either the loan or investment, as his contribution is mostly hush-hush.

The swindler tells the mark that although an entity such as the WORLD BANK or the INTERNATIONAL MONETARY FUND (IMF) guarantees the particular loan in question, the mark's financial contribution is needed to get the ball rolling. The way in which the mark will supposedly make money is by entering into a HIGH-YIELD INVESTMENT PROGRAM whereby his investment will be multiplied a thousand-fold. A portion of his profits must be dedicated to supporting the expenses of the loan project. In reality, the moment his funds are transferred to the investment account, they are removed by the swindler and the mark has now become a fraud victim with only the slimmest chance of recouping his funds.