Two Men Plead Guilty For Long-Running Advance-Fee Scheme
summary
Michael Solomon Markowitz and David Binet pled guilty to conspiring to defraud victims of hundreds of thousands of dollars through a long-running advance-fee scheme involving fake standby letters of credit, with Markowitz also admitting to bank fraud involving over $25 million in forged financial instruments.
paragraph
Michael Solomon Markowitz, 71, and David Binet, 62, pled guilty to conspiring to defraud victims by collecting six-figure advance fees in exchange for fake standby letters of credit (SBLCs) that were never issued. Markowitz additionally admitted to bank fraud by fabricating over $25 million in fraudulent proof-of-funds letters and SBLCs, often using sham Swiss financial institutions to appear legitimate. Both faced up to five years in prison, with Markowitz convicted of conspiracy to commit wire and bank fraud and Binet of conspiracy to commit wire fraud, and were scheduled for sentencing in June 2020.
narrative
Michael Solomon Markowitz and David Binet pled guilty to conspiring to defraud victims through a long-running advance-fee scheme that operated from at least 2012 to 2019, targeting businesses seeking financing for international projects, particularly in Africa. They induced victims to pay hundreds of thousands of dollars upfront for standby letters of credit (SBLCs), which were never delivered or were entirely fraudulent. Markowitz further admitted to bank fraud by creating and submitting over $25 million in fake proof-of-funds letters and SBLCs, often using fictitious Swiss financial institutions to lend credibility to the scheme. Binet, while not charged with bank fraud, played a key role in the conspiracy to commit wire fraud by assisting in the deception and collection of advance fees. Both defendants were indicted by the U.S. Attorney’s Office for the Southern District of New York, following an investigation by the FBI and the Office’s Complex Frauds and Cybercrime Unit. Markowitz pleaded guilty to one count each of conspiracy to commit wire fraud and bank fraud, carrying a maximum five-year sentence, while Binet pleaded guilty to one count of conspiracy to commit wire fraud, also carrying a maximum five-year sentence. They were scheduled for sentencing in June 2020, with U.S. District Judge Paul A. Engelmayer presiding over both cases.
Classified advance-fee(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Parties
both defendantsdavid binetfraudulent sblcsmichael solomon markowitz
Keywords
markowitzbinetpledlinknewplead long-runninglong-running advance-feeadvance-fee schemegovernment non-governmentnon-government sitessites typicallytypically appearappear externalexternal linklink icon
Extracted insights
Dollar amounts 1
- $25.00M $25 million $10M–$100M
Entities 6
- person both defendants
- person david binet
- person fraudulent sblcs
- person michael solomon markowitz
- scheme_term to one count of conspiracy to commit wire fraud
- scheme_term to one count of conspiracy to commit wire fraud and bank fraud
Triples 21
- Two Men Plead Guilty For Long-Running Advance-Fee Scheme
- MICHAEL SOLOMON MARKOWITZ Pled Guilty To Conspiring To Steal Hundreds Of Thousands Of Dollars In Advance Fees From Victims Seeking Standby Letters Of Credit
- DAVID BINET Pled Guilty Today
- MARKOWITZ Pled Guilty On February 26, 2020
- Both Defendants Pled Guilty Before U.S. District Judge Paul A. Engelmayer
- U.S. Attorney Geoffrey S. Berman Said That Michael Solomon Markowitz And David Binet Perpetrated An Advance Fee Scheme Whose Victims Paid Hundreds Of Thousands Of Dollars For Phantom Letters Of Credit
- Michael Solomon Markowitz And David Binet Face The Very Real Possibility Of Being Sentenced To Prison For Their Crimes
- The Complaint, The Informations To Which Markowitz And Binet Pled Guilty, And Court Filings And Statements Made In Public Court Proceedings State That SbLcs Are Financial Instruments That Provide A Bank’S Commitment To Pay A Third Party In The Event That The Bank’S Client Defaults On An Agreement With The Third Party
- Fraudulent SbLcs Are Frequently Used In Advance-Fee Schemes So That Victims Provide Funds Up Front In Exchange For The Promise Of An SbLc
- Markowitz And Binet Engaged In A Scheme To Defraud Victims By Inducing Them To Pay Six-Figure Advance Fees In Exchange For An SbLc
- Markowitz And Binet Purported To Be Able To Help Companies And Individuals Obtain Financing For International Projects, Such As Oil And Gas Projects In Africa
- Markowitz And Binet Stole The Advance Fees And Never Obtained SbLcs
- Markowitz Admitted That He Conspired To Commit Bank Fraud By Providing Fraudulent Proof-Of-Funds Letters And SbLcs Worth More Than $25 Million To Financial Institutions
- Markowitz Used Fake Financial Institutions Incorporated In Switzerland To Provide A Veneer Of Legitimacy For The Transactions
- Markowitz Pled Guilty To One Count Of Conspiracy To Commit Wire Fraud And Bank Fraud
- Markowitz Is Scheduled To Be Sentenced By Judge Engelmayer On June 8, 2020
- Binet Pled Guilty To One Count Of Conspiracy To Commit Wire Fraud
- Binet Is Scheduled To Be Sentenced By Judge Engelmayer On June 15, 2020
- Mr. Berman Praised The Investigative Work Of The Federal Bureau Of Investigation And The Special Agents For The United States Attorney’S Office For The Southern District Of New York
- This Case Is Being Handled By The Office’S Complex Frauds And Cybercrime Unit
- Assistant U.S. Attorneys David Abramowicz, Jilan Kamal, And Michael McGinnis Are In Charge Of The Prosecution
Extracted body text (3,987c)
Press Release Two Men Plead Guilty For Long-Running Advance-Fee Scheme Friday, March 6, 2020 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MICHAEL SOLOMON MARKOWITZ, a/k/a “Sol Markowitz,” and DAVID BINET pled guilty to conspiring to steal hundreds of thousands of dollars in advance fees from victims seeking standby letters of credit (“SBLCs”). BINET pled guilty today, while MARKOWITZ pled guilty on February 26, 2020. Both defendants pled guilty before U.S. District Judge Paul A. Engelmayer. U.S. Attorney Geoffrey S. Berman said: “As they admitted in court, Michael Solomon Markowitz and David Binet perpetrated an advance fee scheme whose victims paid hundreds of thousands of dollars for phantom letters of credit. Now they both face the very real possibility of being sentenced to prison for their crimes.” According to the Complaint, the Informations to which MARKOWITZ and BINET pled guilty, and court filings and statements made in public court proceedings: SBLCs are financial instruments that provide a bank’s commitment to pay a third party in the event that the bank’s client defaults on an agreement with the third party. An SBLC is a “standby” agreement because the bank will have to pay only in a worst-case scenario where the client defaults on an ongoing agreement. Fraudulent SBLCs are frequently used in advance-fee schemes so that victims provide funds up front in exchange for the promise of an SBLC. In reality, and in fact, the victim never receives the SBLC or receives a fake SBLC. Since at least 2012 through 2019, MARKOWITZ and BINET engaged in a scheme to defraud victims by inducing them to pay six-figure advance fees in exchange for an SBLC. MARKOWITZ and BINET purported to be able to help companies and individuals obtain financing for international projects, such as oil and gas projects in Africa. In fact, MARKOWTIZ and BINET stole the advance fees and never obtained SBLCs. MARKOWITZ further admitted that he conspired to commit bank fraud by providing fraudulent proof-of-funds letters and SBLCs worth more than $25 million to financial institutions. On some occasions, MARKOWITZ used fake financial institutions incorporated in Switzerland to provide a veneer of legitimacy for the transactions. * * * MARKOWITZ, 71, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Engelmayer on June 8, 2020. BINET, 62, of New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Engelmayer on June 15, 2020. Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the special agents for the United States Attorney’s Office for the Southern District of New York. This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys David Abramowicz, Jilan Kamal, and Michael McGinnis are in charge of the prosecution. Contact James Margolin, Nicholas Biase (212) 637-2600 Updated March 6, 2020 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 20-088
OCR text (3,987c · plain-text · 99% conf)
Press Release Two Men Plead Guilty For Long-Running Advance-Fee Scheme Friday, March 6, 2020 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that MICHAEL SOLOMON MARKOWITZ, a/k/a “Sol Markowitz,” and DAVID BINET pled guilty to conspiring to steal hundreds of thousands of dollars in advance fees from victims seeking standby letters of credit (“SBLCs”). BINET pled guilty today, while MARKOWITZ pled guilty on February 26, 2020. Both defendants pled guilty before U.S. District Judge Paul A. Engelmayer. U.S. Attorney Geoffrey S. Berman said: “As they admitted in court, Michael Solomon Markowitz and David Binet perpetrated an advance fee scheme whose victims paid hundreds of thousands of dollars for phantom letters of credit. Now they both face the very real possibility of being sentenced to prison for their crimes.” According to the Complaint, the Informations to which MARKOWITZ and BINET pled guilty, and court filings and statements made in public court proceedings: SBLCs are financial instruments that provide a bank’s commitment to pay a third party in the event that the bank’s client defaults on an agreement with the third party. An SBLC is a “standby” agreement because the bank will have to pay only in a worst-case scenario where the client defaults on an ongoing agreement. Fraudulent SBLCs are frequently used in advance-fee schemes so that victims provide funds up front in exchange for the promise of an SBLC. In reality, and in fact, the victim never receives the SBLC or receives a fake SBLC. Since at least 2012 through 2019, MARKOWITZ and BINET engaged in a scheme to defraud victims by inducing them to pay six-figure advance fees in exchange for an SBLC. MARKOWITZ and BINET purported to be able to help companies and individuals obtain financing for international projects, such as oil and gas projects in Africa. In fact, MARKOWTIZ and BINET stole the advance fees and never obtained SBLCs. MARKOWITZ further admitted that he conspired to commit bank fraud by providing fraudulent proof-of-funds letters and SBLCs worth more than $25 million to financial institutions. On some occasions, MARKOWITZ used fake financial institutions incorporated in Switzerland to provide a veneer of legitimacy for the transactions. * * * MARKOWITZ, 71, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Engelmayer on June 8, 2020. BINET, 62, of New Jersey, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison. He is scheduled to be sentenced by Judge Engelmayer on June 15, 2020. Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the special agents for the United States Attorney’s Office for the Southern District of New York. This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys David Abramowicz, Jilan Kamal, and Michael McGinnis are in charge of the prosecution. Contact James Margolin, Nicholas Biase (212) 637-2600 Updated March 6, 2020 Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 20-088