Scam

A trader is a person who buys and sells securities, financial instruments, loans, commodities or other assets either from his own account or on behalf of others or both.  A trader may be a broker, a dealer, or a speculator.  Depending on the type of trading being done, a license may be required even if the trader is using only his own funds; however, if other people's money is at stake a license to trade is definitely required. In a fraudulent investment scheme, the Trader allegedly possesses incredible financial power, agreements with internationally recognized banks, contracts with private investment trusts and and investment houses, and the ability to make enormous profits from modest investments.  The investor is never, ever allowed to see the Trader's contracts as it would "compromise" the Trader.

Additionally, during the persuasion phase of a fraudulent investment scheme the victim is distracted from asking to see any authorizations whatsoever.  Financial con-artists (grifters) wrap their scheme with an aura of such secrecy, mystery, and exclusivity that the victim feels he has been granted a rare privilege by having been invited to join the investment pool.  He will not do anything to rock the boat.  If the victim is willing to invest extremely large amounts of cash or securities and insists on seeing a license, a phony one may be produced but again the victim is distracted from following up with outside verification.

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Fraudsters frequently use a blocked or reserved funds letter to quell investor worries, but the presence of this term should alert consumers to a possible scam. A blocked funds letter has some legitimate uses, but not in the banking sector. Investors should look for other signs of a scam, such as unusual terms or promises, to identify a fraudulent opportunity.

Legitimate Use : Governments and banks issue a blocked funds letter to stop the transfer of money out of a financial institution, but rarely does an individual deal with blocked funds. For instance, a government may block funds for political reasons, such as when the country goes to war with another country or during emergencies. A court may block funds because of the account owner's death or criminal activity. Some countries block foreign currency exchanges to control the value of their currency. Brokers, usually those outside of the U.S. and Europe, can legally trade in blocked funds.

Prime Bank Fraud : Con artists sometimes use a blocked funds letter to perpetrate investment fraud. In a typical scam, the fraudster claims he deals in a secret, highly lucrative and low risk market called "prime bank guarantees," or some other legitimate sounding security. The scam artist asks the initial victim to put money in a bank account to prove he has the available funds -- often in the millions of dollars. The fraudster then asks the victim to request a blocked funds letter from the bank, which requires the money stay in the account for at least a year, as proof of his ability to fund the investment. The bank usually agrees to issue this letter to please a valued customer, and the victim sees no risk because he is the only person on the account. The con artist uses the blocked funds letter to convince other victims to join him in a "surefire" investment.

The fraudster runs away with investor money and asks the initial victim for a trading fee of several thousand dollars. The first victim usually worries so much about the large amount of money in the bank account that he agrees to pay this fee. After weeks of waiting, the scam artist claims some bogus violation by the first victim that violates the trade and forfeits the fee. Tips :Investment fraud schemes have several names and buzzwords attached to them. For example, the scam artist may call the investment opportunity a high-yield trading or roll program, standby letter of credit or International Monetary Fund Backed Security. The scheme may have a shadowy figure leading the investment and faulty documentation, which might contain some legitimate information to further fool the investor.  

SWIFT MT-103 (Field 23)

SWIFT is a closed, private telecoms network whose subscribers are banks, merchant banks, securities houses and other qualified financial institutions. Banks send messages to one another on the SWIFT system using formats known as MTs (Message Types) numbered from MT100 to MT999, each for a different purpose.MT103 is the format banks use when they execute what is known to a layman as a wire transfer, cable transfer, funds transfer, telegraphic transfer or SWIFT transfer.

Suppose A has an account with Bank X and he needs to transfer money to B whose account is with Bank Y in another country. A goes to Bank X, fills out a remittance form with all particulars. Bank X debits A’s account and sends a SWIFT MT103 to Bank Y. Bank Y debits Bank X and credits B’s account and advises B that it has received a remittance. That is all there is to MT103. Nobody who does not work in the telex room of a bank needs to know any more than that. MT103 is a definite, authenticated, unconditional transfer of funds. In the above example Bank Y must credit B’s account, nothing more nothing less. There is no such thing as a Conditional MT103. It's another brokerspeak. 

"Field 23 - Instruction Code" is where the remitting bank (at the request of the remitter) puts in a simple code instructing the beneficiary's bank how to effect the payment, such as "Credit Account under Advice", "Telephone beneficiary on receipt", and such like. MT103 is a straight-through processing mechanism requiring very little manual intervention, except in simple tasks like above. 

MT103 CANNOT BE CONDITIONAL. FUNDS SENT WILL BE CREDITED TO THE BENEFICIARY. You cannot send an MT103 with a condition that the beneficiary's bank must receive, say certain documents, from the beneficiary before crediting his account. Such a request will be rejected by the remitting bank, and if sent in Field 23 (which allows for only a few standard codes) will be rejected and ignored by the beneficiary's bank who will credit the beneficiary's account anyway. Transactions that involve the exchange of money for documents are documentary collections (D/A, D/P etc.) and are processed in other ways, or under Documentary Letters of Credit. Different and specific SWIFT Message Types are designed for them. Banks are banks, they are not lawyers or trust companies. 

PRE-ADVISE MT103?  Never heard of a feature in SWIFT MT103 which can create a Pre-Advice, or to allow for a Pre-Advice to suspend the funds transfer pending certain event or condition to be met, although within the MT103 it could includes a field (this field is definitely not Field 23) which can contain up to 9000 characters that one ordering customer may want to pass on to a beneficiary customer in another structured format, such as EDIFACT or ANSI. That does not mean the funds are not transferred - by the time the message is sent, the 'straight-through processing' of the receiving bank of the MT103 would credit the beneficiary's account.