is this a scam?

My brother wants to invest in this. I think its a scam. What do you guys think?



From: XXXXX
Sent: Monday, 7 June 2004 10:54 PM
To: YYYYY
Subject: Fw: Trading Program
Importance: High


Hi YYYY,

We have been advised by the Fund Manager that funds secured in a 12 month term deposit account with HSBC will be acceptable for the trading program. These funds are not used as a guarantee in any way. As stated in the contract, the funds are to be free of encumbrances.

The basis of the trading program is that a minimum of Ten Million US dollars are purchased and removed from the money market, blocked in an internationally rated bank account in the investors name for twelve months. The main requirement is a letter to the Fund Manager stating that these funds will not be removed, transferred or pledged for the duration of the Trading Program being 12 months and one day.

The removal of the US currency from the money market causes a temporary shortage. The fund manager/trader is able to negotiate with the Western European Trading banks, who are willing to pay the investor a fee to keep the funds out of circulation for 12 months as it increases the value and selling price of their own US$. All they require is proof that the funds exist in legitimate banking channels, and will not be used, removed or pledged during that time.

The HSBC Manager, Exchange Centre, Sydney has confirmed that there is no way any party other than the signatory can access the funds held in the account. She will put a hold over the account to ensure everything goes through herself personally. We believe the funds will be very secure with HSBC and will be repaid to investors as per a normal 12 month term deposit account.

We are now in a position to push forward with the fund raising. Please advise if you would like further information. I will meet with the HSBC Manager again this week to go over details.

Kind regards
XXXX





Trading Program Proposal


Amount Required: US$5 Million
(as one allotment or by way of a Syndicate)

Syndicated Amounts: Trust of 20 units @ US$250,000 per unit

Security of Principal: Funds are locked in an account at a nominated Bank and repaid after 12 months.

Returns paid to Investor: Approx 24.5% per month nett (USD)
Paid monthly

Term: 12 months

Funds Required By: 20th June 2004

Entry into this Trading Program is By Invitation Only.

For further details contact XXXXX at XXXXXX


The Trading Program is one of the programs conducted by several leading internationally rated Western European Banks. The Trading Program accepts investments of
US$10 million, US$50 million, US$100 million up to US$1 billion.

In this instance we are investing US$10 million. We have US$5 million on standby and require the balance of US$5 million to enter into the Program by 30th June 2004. We are also able to raise a second fund of US$10 million at any time.

During the entire term of the Trading Program, returns from the Trading Program will be credited into the Investors bank account on a monthly basis, and the capital funds are not moved at all from the Investing Party’s bank account. The Trading Program does not require the Investing Party to part with his funds at any time during the entire duration.

Our Lawyers have studied all documentation required for this Program.


Trading Program Overview

1. The Investing Party, which may be an individual, company or Trust, deposits
US$5 million of cleared funds into a nominated bank account in Australia in the name of the Investing Party for a period of 12 months, with specific conditions to the nominated Bank that the funds are to be blocked from use and cannot be removed or pledged or used as a Guarantee by any party whatsoever, and are to be repaid to the Investing Party after the 12 month period.


2. The nominated Bank is to confirm that the investors funds will be blocked from use and no party, including the Fund Manager, has the right, authority or consent to move, transfer, replace and/or pledge the funds being held in the bank account.

3. The Investing Party shall execute a Fund Management Agreement for the appointment of Mr Alan Samuel as Fund Manager for the Trading Program, together with a Request for Services letter, and a Non Solicitation Letter. Copies of all documentation will be provided to Investors in due course.

4. The nominated Bank will then provide “Proof of Funds” by way of a letter to the Fund Manager for verification between the Investing Party’s Bank and the Trading Bank. The purpose of the “Proof of Funds” is for the Trading Bank to verify that the funds are existent in legitimate banking channels and that it is blocked from other use for the duration of the Trading Program. The “Proof of Funds” must be signed by two senior management officers of the nominated Bank.

5. The Investing Party shall execute a Power of Attorney to the Fund Manager that will only permit the Fund Manager to enter into the Trading Program on the investors’ behalf and to only negotiate on contractual issues with the Program Traders and other authorities to disburse the returns generated by the Trading Program. The Power of Attorney does not allow the Fund Manager any right whatsoever over the use of the funds in the bank account of the investor.

6. Upon receipt of all required documentation, the Fund Manager will proceed to finalise paperwork for participation into the Trading Program.

7. The payment of nett returns from the Trading Program to the Investing Party is on a monthly basis from the internationally rated Trading Program’s Paying Bank directly into the bank account specified by the Investing Party. The returns are fixed in USD. As the exchange rates may vary each month the Bank will charge a conversion fee.

8. The gross average monthly return from the Trading Program to the Investing Party is approximately 30% per month (USD), prior to monthly deductions for Fund Management fee and other agreed expenses such as bank charges etc. The actual rate of return shall be subject to the Bank rates and the financial markets environment at the prevailing time of entry into the program.

From our knowledge of the trading, which is bank-to-bank confidential, a trade is made upon entry into the Program that locks the interest rate at around 30% per month for approximately 12 months. This ensures a positive return to the Investing Party for the duration of the Trading Program.

9. The Investing Party shall pay a monthly fund management fee out of the returns of the Trading Program on a monthly basis throughout the duration of the Program. The fund management fee based on a US$10 million capital tranche is US$550,000 per month, giving the Investing Party a nett return of approximately 24.5% per month or US$2,450,000 per month. On an investment of US$5 million the Fund Management fee payable will be US$225,000 per month, returning a nett amount of approximately US$1,225,000 per month to the Investing Party or 24.5% per month nett.

10. All initial costs directly incurred by the Fund Manager for the purpose of investing into the Trading Program on behalf of the investing party shall be reimbursable to the Fund Manager only upon the receipt by the investing party of the first month returns from the Trading Program. The claims shall be payable by way of deduction from the investing party’s first month returns. These claims shall mainly represent expenses incurred by the Fund Manager for travel to Trading Bank(s) and Program Trader etc for the purpose of negotiating and executing the relevant contracts and agreements for placement in the Trading Program.



The Fund Manager, Mr Alan Samuel, is known to us through personal and investing contacts. He is assisting our Lawyers to ensure all documentation is to their satisfaction, and has agreed to our Lawyers drafting their own Power of Attorney to ensure Mr Samuel has limited powers to only negotiate on contractual issues with the Program Traders and other authorities to disburse the returns generated by the Trading Program. The Power of Attorney does not give Mr Samuel the power to move, pledge, transfer or remove the investors’ funds from the nominated Bank account.

Legal fees
The legal costs and administration charges in setting up the Syndicated Unit Trust are to be borne equally by all unitholders.

Units in the Trust
Our Lawyers will set up the Trust with a maximum of 20 units. As we require
US$5 million, each unit will be valued at US$250,000. We are seeking expressions of interest per unit. Each unit can be in the name of an individual, partnership, or company.

All documentation is to be treated with strict confidentiality and will be made available upon request.



We are currently seeking Expressions of Interest into this Trading Program, subject to the required confirmation from the nominated Bank.

As time is of the essence, the Expressions of Interest forms must be treated on a “first in first served” basis.






Trading Program


Expression of Interest Form

Please email or fax this form to XXXXX
Email: XXXXX
Fax: XXXXXX


Name

Name of Investing Party ie. Company, Trust
Address


Telephone

Email

Amount:

US$250,000 per unit
(approx AU$350,000)


Date




I understand that my Intention to Invest is subject to confirmation from the nominated Bank, and sighting of all documentation pertaining to the Trading Program.

I acknowledge that the amount I wish to invest will be available by 20th June 2004 as cleared funds.