Letter of Credit Forum

Law and order news Hongkong reports that a 29 and a 37 year old HongKongese set up various shell companies. Then, the pair used forged documents, including invoices and cargo receipts, to defraud nine banks who issued 158 Letters of Credit worth a total of $360 million from June 27, 2006 to June 13, 2007.

The punishment: 40 and 48 months of jail time.

Banks have shown a rather superficial and predictable approach to verification of creditworthyness in the housing market. Apparently, this negligent credulity expanded also to international trade.

40 to 48 months of jail time ? I do not know what the damages are, but the punishment seems rather low.