Fraud Alert: Bogus Treasury Notes, Bonds and Account Numbers

The U.S. Department of the Treasurys Office of Inspector General (OIG), is investigating incidences whereby individuals are using fraudulent Treasury-related financial obligations or accounts to purchase or attempt to purchase vehicles from automobile dealerships or pay debts.

In September 2008, it was reported to the Treasury OIG that an individual attempted to purchase a $67,000 automobile at a dealership in Phoenix, Arizona utilizing a bogus promissory note and bond. The purported value of the note was $75,000 and the bonds were purported to represent government obligations of $150,000 and, in another instance, up to $900,000,000. Dealers must be alerted to the use of these types of notes and bonds, which might or might not be referenced as U.S. Treasury bonds or promissory notes; and/or identified as personal promissory notes; and/or private offset bonds; and often contain the name of the Secretary of the U.S. Treasury, currently Henry Paulson, on the document.

However, the name of the Treasury Secretary would not appear on any document listed as a private bond or promissory note since these items are not backed or guaranteed by the U.S. Treasury. Moreover, the only type of paper bond issued by the U.S. Treasury that a citizen can purchase today is a U.S. Savings Bond. All other Treasury Bonds are electronic transactions and the buyer does not receive an actual hardcopy document.

A similar scheme was also reported to the Treasury OIG in Indiana, in which unauthorized individuals were providing automobile dealerships and other retail businesses with bank routing and account numbers to purchase vehicles or other property, and/or to payoff personal debts. They represented these account and routing numbers to be personal grant or bank accounts, and directed the dealerships to electronically debit these accounts to fund payments for their purchases. In the reported instance, the account was a Treasury account for vendors to electronically transmit payments to the Treasury Department.

And, as the WANADA Bulletin reported this past July, a similar International Bill of Exchange scam was attempted at a Maryland dealership.

If you have any information regarding such Treasury-related fraudulent activities, we request that you contact the Department of Treasury, Office of Inspector General (OIG), Office of Investigations Hotline at 1-800-359-3898 or via email at: Hotline@oig.treas.gov.