Alleged Vinclum Corporation fraudsters conned their creditors of more than $1.5m, a sum which was to be used to leverage $16m in an investment scheme that never took place.
Robert Allen, then director of Vinclum Corporation, Toronto, together with Daniel Carrasco, and several other individuals employed by the Vinclum Group, allegedly persuaded their investors to wire funds for the scheme.
Allen and his associates reportedly convinced one financial services director to part with an initial $250,000.00, which in several stages would eventually generate profits of $16m. A second party, acting on behalf of six clients, invested a further $1.25m in the scheme. The funds would be used for the purchase of DLCs (Documentary Letters of Credit).
A DLC is a frequently used banking instrument in international trade. It instructs an issuing bank to pay a seller, normally in connection with the export of goods, with the bank acting as an intermediary in the transaction. The holder may be able to borrow against a future payment, at a loan-to-value ratio of up to 50%. Allen and the Vinclum Group were said to have connections with international banks that would facilitate a legal scheme to exploit this instrument.
Under the scheme, when a $4m DLC was redeemed, it generated cash of $2m. These funds would be used to purchase a larger DLC of $32m, which would generate $16m in cash, which would then be distributed between the alleged fraudsters and the victims.
The victims wired the funds with the belief that DLCs would be bought and monetized. However no such DLCs were purchased in relation to the agreement, it is claimed.
Despite repeated requests, and assurances by the Vinclum Group that the funds would be returned, no refund has been received.
A motion for injunction has been filed to freeze the assets of the accused while fraud investigations are underway.
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