The Deception of Perception

How many, including the well educated would tempt or fall prey to Financial Fraudsters who parade proposals which are hard to refuse and too good to believe. The article below tries to educate and understand the perception of that Deception. 

THE DECEPTION OF PERCEPTION

Philosophers have debated perception for centuries and for some reason it has been
thought the fact that we can misperceive things means that all perception is suspect.
Therefore, what we say, even when we have not misperceived, is in need of some sort
of standing justification. In this setting our attention will be drawn to the possibility of
illusion and eventually to “The Deception of Perception”.

Let’s take for example the following, you and I are standing face to face and I raise my
hand. I hold it in front of me with the palm facing you, as a police officer would raise his
hand as if to halt traffic. I ask you what do you see? You reply, “Your hand.” That is
correct but you see the palm of my hand and I see the back of my hand. We both see
my hand but we perceive it differently.

This, of course, relates to our assigning words to physical objects, as we perceive them,
too.

Now let’s examine another approach of perception, that of “conception”, and
briefly touch upon the way people see colored objects and what color those
objects actually have. If an object has the color “red” then “red” things normally
look “red” to us because we have the “concept” of “red”, which was taught to us,
and we now associate the color “red” when we see an object with that color. Not
necessarily because it is “red” from the analytical view, but because it is
“conceptual” in that we perceive it to be “red” and make a connection between
being “red” and looking “red” under normal conditions.

Now the “Deception of Perception” as we examine Bank Debentures will be
our focus. First, in the physical sense that they do exist, and second, in the
conceptual sense how they only exist in the special context as they come into
existence through the teaching of fraudsters.

Physical Sense

In the physical sense a bank debenture is an unsecured borrowing by a bank or
company and it is usually of a medium or short term. Companies or banks issue them in
order to raise capital. If the issuing entity (company or bank) has a high credit rating or
is investment rated, it would issue their debentures at a relatively low return and the
price would indicate a very low risk. Furthermore, their debentures would be traded on
well known major markets and the financial media would acknowledge their issuance.
Specifically when banks issue debentures, rating agencies such as Standard &
Poor’s or Moody’s, predetermine the “risk factors” by the short and medium-term
credit risks of the issuing bank. Banks with solid histories of investment grade
debts in the past, offer long term returns that are calculated on basis points slightly
higher than U.S. Treasury securities. (A basis point is equal to 1/100 of one
percent).

Such high quality debentures are offered at a very low risk and a very low return.
These solid low risk/low return issues are usually held until the paper matures and
there is practically no secondary market since the paper is held for the full term by
the original investors.

Bank debentures, therefore, do not pay rates above the current market rate for
comparable paper and certainly, banks do not discount them. Since they are held for
the full term by the investors who bought them at their full face value, they also only
expect the moderate interest return as specified when they were purchased.
Conceptual Sense

Here a fraudster plays traffic cop. He holds his hand up to you, a potential victim,
and says, “Stop!” “Look at what I have for you. Just look at these bank
debentures.” On the palm of his hand he holds standby letters of credit, bank
guarantees and other “make-believe” bank instruments, which he lumps together
and categorizes as “High Yield Investment Proposals” (HYIP). With his palm
still facing you, he proceeds to describe and define these bank debentures that will
be offered as “Prime Bank Debentures” that are part of a consortium of the top
“200 World Prime Banks”. He further says that these “Prime Bank Debentures”
will be bought and sold on a secretive secondary market with “entry and exit”
sales guaranteed before any trade is ever made, therefore, there will never be any
risk.

Now let’s furtherly look at the palm of his hand as you see it. Here are:

Discounted standby letters of credit

Discounted bank guarantees

Cashier’s checks

High Yield Investments with zero risks

Prime Bank Debentures

Medium Term Notes

Introduction to a “Trading Program”

Now let’s look at the other side of his hand.

“Discounted” standby letters of credit and bank guarantees do not exist.
These instruments, standby letters of credit and bank guarantees, have
periods of validity, they expire, and are, of themselves, not negotiable
instruments. Furthermore, the obligation that they represent is not necessarily
transferable. They do not pay interest, there are no coupons attached and they
are not discounted. Although they are used to guarantee payment obligations
they are not investment instruments. They are not bought, sold or traded on any
market, primary or secondary, and standby letters of credit or bank guarantees
are never traded – for any reason, ever!

Cashier’s checks are irrefutable obligations of the bank to pay, and are listed as
its liability. They are not discounted, pay no interest, and the customer pays the
face value on the check when it is issued on his behalf.

High Yield Investments (HYI) with zero risks that are to yield anywhere from two
percent to four or even greater amounts monthly are non-existent. The basis of
these HYI’s was to be trading with “in and out, entry and exit sales” that are
prearranged or foreordained before any trade is even considered. The truth of the
matter is that there really are never any trades that are going to be made. Ever! In
most HYI programs, monies are never invested in legitimate instruments, but
rather, are nothing more than glorified Ponzi schemes. Money from later investors
is used to pay the exorbitant yields to the earlier investors, and when there are no
new investors, the Ponzi scheme collapses.

Prime Bank Debentures schemes never seem to demonstrate a logical or sound
economic basis for the transactions. Fraudsters never attempt to explain how there
can be such returns with no apparent risks. It is obvious that they must remain silent
on this matter. Especially if they were to look at the back of their hand when trying to
explain their functionality. Prime Bank Notes (PBN’s) and Prime Bank Debentures
(PBD’s) do not exist. For some unexplained reason fraudsters have “lumped” Prime
Bank Notes and Medium Term Notes (MTN’s) together to make them
interchangeable with Prime Bank Debentures. And, here is where confusion breeds
confusion, so let’s clarify that now, albeit, somewhat repetitive. Prime Bank Notes
(PBN’s) and Prime Bank Debentures (PBD’s) are fake, they do not exist. Medium
Term Notes (MTN’s) are real. The US Government has warned that PBN’s and
PBD’s do not exist but because fraudsters have lumped them together, occasionally
reference is made that all three, PBN’s, PBD’s and MTN’s are not real. You should
visit http://www.sec.gov/divisions/enforce/primebank.shtml, it will help to clarify this
nebulous area.

Medium Term Notes (MTN’s) do exist and are sold by many major brokerage
houses. In conjunction with this, you might want to visit http://www.cob.ohiostate.
edu/~fin/811/opler/week2/tsld020.htm to have a brief introduction to the
MTN market. However, fraudsters are indeed reckless. They oftentimes offer
MTN’s to potential victims by dressing them up as HYI proposals that will yield
unreasonably high returns with no risks. They even have the audacity to refer to
them as bank debentures.

Introduction to a “Trading Program”. These programs have been around for
decades. One of the basic premises is that the funds will remain in the account of
the investor and will be solely under his control at all times, since the trading will
always take place in another bank. Hogwash! Another is the “mirror account”
whereby the investor’s funds will remain in his account and they will be “mirrored”
in the Trading Bank in order to create the necessary leverage in order for the
trades to be made. Bull!

This writer has never seen one of these trading programs work nor has anyone ever
confirmed to him that they know of any that have been successful.
Now let’s look a little farther into the conceptualizations that the fraudster is inculcating
when he holds his hand in front of you. (Remember the fourth paragraph above?)
♦ He introduces you to both legitimate and illegitimate instruments and transactions
and colors them as he wants you to perceive them. Once you can see the palm of
his hand, as he wants you to see it, he will have set the scene for the “Deception
of Perception”.
♦ The investment offer he introduces will emulate legitimate transactions.
♦ He will make references to prominent institutions that are participating in this
program, such as, the Federal Reserve, the World Bank, the International
Monetary Fund, and the United Nations, among others. Or, that humanitarian
agencies will also invest in the program and eventually benefit from the investing
in these high yield instruments. The International Chamber of Commerce (ICC)
will also have endorsed it.
♦ He will concoct a story that only the very wealthy participate in programs offering
investments like these he is offering - an HYIP, with “no” risks.
♦ He may also present forged documents and instruments to convince you of the
legitimacy of the program.
♦ He may make a statement that your funds can be placed in a bank account and
then used, without any risk, to trade bank debentures and other financial
instruments.
♦ He may also state that you will be able to rent or lease U.S. Treasury Obligations
and then use these leased obligations as security or collateral for further trading.
♦ He will clearly and cleverly state that it will be practically impossible for you to go
behind the scene to attempt to verify these transactions or the program itself.
Even your banker may not know of it and if he did, he would not be permitted to
share his privileged information with you. This is a very secretive and privileged
program, and if you attempt to investigate its authenticity, you might be expelled
from the program permanently without the opportunity to be invited again – ever!
Furthermore, you will be asked to sign “non-circumvention” and “non-disclosure”
documents. But, the real kicker, so to write, will be when you are compelled to
sign documents prohibiting you from sharing any information about this
investment venture with law enforcement. Although this request is illegal just
weigh the following:
♦ Let’s assume you sign the document with the prohibition clause for sharing
information about this venture with law enforcement. Then, as an eventuality, the
investment program collapses and you decide to “turn them in”. It is conceivable that
you might be charged with conspiracy or an attempt to obstruct justice since you
signed that document, knowing then, but only admitting now, that you would “not”
share information concerning this venture with law enforcement; even though, it is
only now that you are exposing it as a fraud or deception. It is conceivable that you,
an innocent and uninformed party, may become involved with a major criminal
matter.

So now the “Deception of Perception” has a new dimension. Depth. The palm of
the hand you saw originally represented only one dimension. Your concept of that
palm, although vague at first, became more distinct as the fraudster described and
defined, with his own definitions, the investment instruments he would make
available to you.

Long back, in Psychology 101, we were introduced to the concept of the “Four
Selves”:
What we are,
What we think we are,
What we would like to be, and
What other people think we are.

Depending on the amount of positive reinforcement we received, we began to
conceptualize and formulate one or more of those selves – how we actually “perceived”
our self. Along the way, we sometimes could not live up to the perception we had of our
self and we became deceived.

Some how, the fraudster, the con man, began to paint the colors he wanted us to
see on his hand. We began to conceptualize. We began to perceive his hand as
he wanted us to see it, and eventually at the moment of awakening, we realized
that our perception had deceived us. He had created for us, a new personality.
One that he would develop for us, “an investment four selves”, and since it
could not fully mature, it became “The Deception of (Our) Perception”.