port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. The in-bond process allows imported merchandise to be entered at one U.S. The final rule adopted, with several changes, proposed amendments to CBP regulations regarding the in-bond process. Customs and Border Protection (CBP) published a final rule entitled Changes to the In-Bond Process. Despite what a bogus valuation (104K JPG file, file uploaded 1/24/98) might claim about CS&C bonds, the bonds have no value other than as collectible memorabilia, since CSX has disclaimed any liability for redemption of these bonds, and they are most certainly not payable in gold. A museum in Grand Rapids, Michigan, packaged the bonds with other historical information about this railroad for sale as collector's items for $29.95 each. After the bankruptcy proceeding, the bonds remained in court archives until they were discovered in the basement of a federal building. At that time, investors presented their bonds for payment out of funds from the foreclosure sale and received a distribution amounting to less than 25 cents on the dollar. All claims to money due under the bonds, which had a face value of $1,000 each, were resolved 112 years ago in the 1876 bankruptcy proceeding. CSXs predecessor did not assume any of CS&Cs outstanding debt, including the railroad bonds. Click to view a full-size image of a CS&C bond (99K JPG file, uploaded 1/24/98).ĬS&Cs creditors forced it into bankruptcy in 1876 and a predecessor of CSX Transportation, Inc. In 1873, CS&C issued 5,500 thirty-year gold-backed bearer bonds, paying seven percent interest to finance construction of a proposed railroad. We neither issued these bonds, nor are they payable in gold, backed, or guaranteed by us or any other part of the United States Government. It has been alleged that these securities are payable by us in gold. BondsĪ historical bond fraud case in point involves bonds issued by the Chicago, Saginaw and Canada Railroad Co. All these false assertions have been used to defraud investors into paying as much as $150,000 for historical bonds that regularly trade for $25.Ĭhicago, Saginaw and Canada Railroad Co. In several cases, the third parties issuing the valuations appear to be working in conjunction with the scam artists. As stated above, there are no such trading programs. Scam artists using such valuations may also make the false assertion that while perhaps not payable today in gold or in money, the bonds are used in high-yield trading programs in the United States, offshore and in Europe. Lie: Historical bond trading programs yield high rates of return through the buying and selling of "debenture" or "medium term notes" supposedly issued by "prime" or "top" European or "World" banks.įact: Officials of leading European banks, including Barclays Bank, have denied any participation in such programs and there is no evidence that the market for such instruments exists as described by scam artists. The scam artist's use of humanitarian or infrastructure development theme is a trick to (1) make the investor want to believe that the trading programs are real and (2) make the investor believe that they could be helping a Third World country by forking over their money. Lie: Funds in, or some proceeds from, these high-yield trading programs go to humanitarian purposes or infrastructure development projects that are approved by the United Nations, the World Bank, or the Treasury Department.įact: There are no such "trading programs" or "high-yield investment programs." For example, the IMF has issued a warning about financial schemes misusing its name. Lie: Historical bonds can be used in high-yield investment "trading program" sanctioned by any, some, or all the following entities: the International Chamber of Commerce ("ICC"), the IMF, the World Bank, the United Nations, the Federal Reserve Board, a Federal Reserve Bank, and the Treasury Department.įact: There are no such "trading programs," and none of these entities ever sanctions or regulates such private investment activity. As these historical bonds were neither issued nor backed by us or any other part of the United States Government, it would be patently absurd to suggest that we would establish a sinking fund to retire these historical bonds.
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