FBI Convicts Several Involved in Bust-Out Scheme
When reading news from NACM’s Asset Protection Group (APG), you may come across the term ‘bust-out scheme’. What is a bust-out scheme? In this type of fraud, new ownership of a company is established; the new owners abuse the identity and credit line of the company to receive as many loans and goods on terms as possible.
In a deceitful, well-planned scenario, the perpetrators of a bust-out continue normal and satisfying payment trends for months–maybe even years–before executing the initial intentions. The payment trends showing satisfactory status allow these criminals to request and obtain even higher credit lines, as well as establish new relationships with different companies. What happens once these perpetrators are satisfied with the amount of goods received from your company, along with a dozen others? They disappear!
If you extend business credit to a bustout fraudster, you will likely end up writing-off “bad debt” in the five-figure range. Did you ever suspect fraudulent activity before writing off a bad debt? A recent survey conducted by the Asset Protection Group revealed that approximately 40 percent of respondents working in the business credit field might not even know if any of their bad debts are attributable to fraud. How can you prevent business credit fraud if you don’t know how to protect yourself, have no resources for information regarding fraudulent activity, and just as importantly, don’t know how to evaluate if you’ve been hit by a fraud? NACM’s Asset Protection Group is your best bet–a dedicated membership network that helps you protect your company’s bottom line!
The Federal Bureau of Investigation of Los Angeles, California has worked diligently to convict several perpetrators of orchestrating a recent bust-out scheme. These individuals plotted to commit fraud against victim companies that unsuspectingly extended terms. Various aliases were used to open different bank accounts and veil the identity of the actual persons behind the scheme.
In 2002 and 2003, APG issued several releases informing members of reported undesirable business practices for several subject companies: Tsunami Enterprises Corporation of Denver, Colorado; DT&M Corporation of Beverly Hills, California; and Surfside Industries, Inc., dba Channel Island Circuits, of Goleta, California. Edmond Masjedi (35, of Beverly Hills), Touraj Benshian (38, of Los Angeles), and Mohammad Majidi (42, of Los Angeles) plead guilty to fraud and money laundering charges in related cases. Two other defendants, Masoud Sabet, 52 and Masoud Rahmani, 34, whom are suspected of fleeing to Iran, have been indicted on roles of participation in this bust-out scheme. …