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Background Checks for Potential Financial Fraud Scams

This tough economy has generated a whole new series of fraud scams.  Some of which have come to my attention through clients.  One such  may revolve around the pretext of the TARP or stimulus package bailouts.   This proposition is posed as a win-win situation for everyone.    Whether it is in the end remains questionable.

This particular proposal was passed to us by concerned parties.  We helped them vet the company so at the end of the day our clients did not go forward with the loan.  We believe the client may have avoided significant financial losses as well as the embarrassment of being taken.

But some out there may not be so lucky.  Our clients are savvy people, and there were enough red flags before they even brought it to Corra Group for review that put them on alert.    As part of our business research service, we can run a series of background checks in the corporate entities involved as well as the principal executives.      It is the prudent way to go.   The few bucks you spend up front  for the different background checks can save a whole truckload of aggravation.

Remember, many scams work when the people and their businesses are in desperate need of money.  The economic downturn has left them wanting and they are less prone to read the fine print or conduct the corporate research that is necessary when vetting these financial transactions.

In this case, our client was supposed to pay $2,500 as a processing fee so that the various brokers involved would use their best efforts to obtain the desired loan.   Our clients were also supposed to put up about ten percent of the line into an escrow account.  If the loan was not obtainable, they were to get their ten percent deposit back.

However, here is one red flag.    The escrow company was not specified.   It could have been offshore.  It could have been nonexistent.  In any case, clients and Corra alike feared , if the line was denied or otherwise unachievable, it would tough getting the entire down payment returned.  If that were the case, our client would have to calculate legal fees and time factors that my be necessary in retrieving the deposit.

At any rate, do not engage in financial transactions with unknown sources without conducting adequate business researc, including business credit reports.  Even then… be careful.

Find below the pitch letter that our clients first received.  Looks good.  Almost too good to be true.  And there is the issue.   We have removed any names of companies and individuals for obvious reasons.  (See Below)

As part of the stimulus package, banks have received funds from the federal government called TARP.  We have secured a very competent and experienced broker for these loans who has a 90% success rate on his applications.  His fees are paid by the bank and are regulated by the government.  We of course do not collect any fees or commission in arranging these loans.

In a nutshell, the loans are 10 year; 4.75% with a minimum of $400,000.

Also in a nutshell, the requirements are as follow:

  1. minimum 10 new jobs created;
  2. 680 credit score;
  3. experience or training (we provide that);
  4. when approved 10% down;
  5. personal assets above $250K;
  6. 3 years personal taxes;
  7. projections, business plan (we’ll help with that);
  8. 10-15 days to approval, 2-4 weeks to disbursement.

Please note that should you wish to open more than one location, you can request the funds for that purpose as well.  The loan is a line of credit, you only pay interest on what you borrow.

Another interesting aspect of it is that the proceeds for the loan can be used at your discretion, as long as a new business with a minimum of 10 new jobs is created, for example to also support your existing location.

From our side, we will come up with reduced rate for development and franchise fees to do our part to make this happen.

Please let me know if you are interested, in which case I shall inform you about the next stage.

This is a one-time opportunity which is likely to expire at the end of the year.  Half of the funds dedicated to this loan are already gone.

I hope this will stimulate you all to stimulate the economy and create jobs and wealth.

Thank you,

By Gordon Basichis

Gordon Basichis is the Co-Founder of Corra Group, specializing in pre-employment background checks and corporate research. He has been a marketing and media executive and has worked in the entertainment industry, the financial, health care and technology sectors. He is the author of the best selling Beautiful Bad Girl, The Vicki Morgan Story, a non-fiction novel that helped define exotic sexuality in the late twentieth century. He is the author of the Constant Travellers and has recently completed a new book, The Guys Who Spied for China, dealing with Chinese Espionage in the United States. He has been a journalist for several newspapers and is a screenwriter and producer.