A negotiable, bank-issued certificate representing
ownership of stock securities by an investor outside the country of
origin. An international depository receipt, or IDR, is the non-US
equivalent of an American Depository Receipt. These instruments have been
used since the 1970's to facilitate international trading in securities.
The securities backing the receipt remain in the custody of the issuing bank or
a correspondent [bank].
The
Scam: In the swindler's world, an IDR or ADR is called
a Safekeeping Receipt. The swindler uses the term to convince his mark
(the investor victim in a high-yield investment scam) that funds can be
exchanged for a Letter of Credit or Prime Bank Guarantee that will be kept by
the "trading bank." In return, the "trading bank" will
issue a safekeeping receipt for the guarantee. Then the "trading
bank" puts the original safekeeping receipt in safekeeping and issues a
second safekeeping receipt for the first one. This is what the mark is
supposed to receive, or the mark is supposed to receive a certified copy of the
original receipt. Whatever. The swindler further tells the mark he
must assign the safekeeping receipt over to the swindler to obtain a loan, the
proceeds of which will go into the trading program to purchase more guarantees
that will be sold for profit.
What really happens is this: the mark sends his funds off to purchase a bank
guarantee of some sort. The funds are usually sent either to an alleged
Trustee's or Attorney's Account. They may even be sent to an account in
the investor's name over which the swindler has been given a Power of Attorney
by the investor. The swindler removes the funds from the bogus account and
proceeds to the nearest casino. The investor is left with no guarantee, no
safekeeping receipt, no profits, no money to pay the rent.
Worst case scenario: The mark already has a safekeeping receipt for
securities. The safekeeping receipt is assigned over to the swindler who
gets a loan against the value of the receipted items. He takes the loan
proceeds to the nearest casino and leaves the mark with the responsibility of
repaying the loan with interest.
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