FBI (FEDERAL BUREAU OF INVESTIGATION) WARNS ABOUT THE CHRISTMAS TRADE NO BUSINESS WANTS

• NCJ Number: 15476
• Author(s): J E HOOVER
• Date Published: 1967
• Length: 3 pages
• Corporate Author: Chamber of Commerce of the United States
• Publication Format: Document
• Language: English
• Country: United States of America
• Note: REPRINT FROM NATION'S BUSINESS (NOVEMBER 1967).

Annotation

REPRINT OF 1967 J. EDGAR HOOVER ARTICLE ON THE OPERATION OF THE PLANNED BANKRUPTCY 'SCAM' USED BY ORGANIZED GAME TO DEFRAUD BUSINESSMEN.

Abstract

THIS PLAN INVOLVES THE TAKEOVER OF AN ESTABLISHED COMPANY WHICH HAS A GOOD CREDIT RATING. THE SCAM ARTIST THEN PURCHASES HUGE STOCKS OF VARIOUS MERCHANDISE ON CREDIT, AND THEN DECLARES BANKRUPTCY BEFORE PAYING FOR THE ORDERS. ONLY MERCHANDISE THAT CAN EASILY BE CONVERTED INTO CASH. OTHER ASPECTS OF THIS SAME 'SCAM' OR PLANNED BANKRUPTCY INCLUDE LOAN SHARKING TO GAIN ACCESS TO A LEGITIMATE BUSINESS, AND PLACING HUGE RUSH ORDERS FOR MERCHANDISE AROUND THE CHRISTMAS SEASON AND GAMBLING THAT MANUFACTURERS WILL RISK FILLING A BIG CHRISTMAS ORDER WITHOUT RUNNING A PROPER CREDIT CHECK. SPECIFIC FRAUD AND LOANSHARKING CASES WHICH HAVE COME TO TRIAL ARE DESCRIBED.