For Immediate Release
Media Contact: Office of Inspector General (202) 565-3908
Washington DC - September 24, 2010. The Office of Inspector General (OIG) for the Export-Import Bank of the United States (Ex-Im Bank) announced today that its Special Agents and Ex-Im Bank staff stopped a nearly $6 million fraud in progress when it was discovered that the parties had lied during the underwriting process. Ex-Im Bank terminated its relationship with the lender for covering up the fraud. As a result of canceling the lender’s Master Guarantee Agreement, five pending loan applications totaling over $7.4 million in requests for financing were also cancelled.
The fraud was uncovered by Ex-Im Bank staff in the course of a due diligence check when they suspected false documents had been provided concerning the exportation and payment of millions of dollars in oil rig equipment. The equipment had allegedly been exported to Mexico. The information and evidence were developed by OIG Special Agents, who in close coordination with the Department of Justice's Fraud Section, moved to stop the transaction. The evidence gathered showed that the transaction was fraudulent and designed to lure Ex-Im Bank into guaranteeing a loan that, instead of resulting in an export of U.S. goods, would have instead resulted in the perpetrators splitting the cash proceeds.
To protect funds at risk, the OIG diligently provided the evidence to Ex-Im Bank management which resulted in Ex-Im Bank's cancellation of the policy and pending transactions, and terminating their relationship with the lender.
The investigation is continuing, and caps significant efforts to combat fraud by the OIG Office of Investigations since reaching current staffing levels in 2009, which have since resulted in 14 arrests, 40 criminal charges, and millions of dollars in criminal forfeiture, restitution, and cost savings to the American taxpayer.
"We have a highly trained team of international, financial fraud agents to pursue these cases world-wide," said Assistant Inspector General for Investigations Lawrence Valett. "Our collaborative and effective working relationships with Ex-Im Bank staff and our law enforcement partners around the globe have contributed significantly to our ability to detect and prevent fraud, waste, and abuse."
The Ex-Im Bank, an independent agency of the United States Government, is the official export credit agency of the United States. Ex-Im Bank issues insurance and guarantees to banks and financial institutions to insure or guarantee loans to creditworthy foreign companies for the purpose of purchasing U.S. goods and services. The Ex-Im Bank loan insurance policy or guarantee provides that if the foreign borrower defaults on its loan repayments to the lending institution, the Ex-Im Bank will reimburse the amount of the outstanding loan principal and interest to the lending institution.