BOND FRAUD involves the sale of stolen, fraudulent, or worthless United States securities. The Securities Act of 1933 defines a security as “any note, stock, treasury stock, security future, bond, collateral-trust certificate, or certificate of deposit.” The most common bond used to perpetrate fraud is the historical bond.

Historical bonds, which were once valid securities of various American entities, are now worthless as securities and only collected and traded as historical memorabilia. Swindlers are selling historical bonds to naive investors at prices far exceeding their fair value as collectibles, claiming that the bond is worth millions of dollars, is redeemable in gold, and is backed by the U.S. Department of the Treasury.

Swindlers typically supply third-party valuations or authentications supporting their claims. These bonds, however, have no ...

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