When the sight drafts would bounce a few days later, "Barrow and his co-conspirators would replace the chargebacks with other fraudulent sight drafts," Hamilton said.
Wholesalers in Little Rock and North Little Rock "were aware of the bogus nature of these sight drafts and accompanying documents and the absence of any title certificates with the drafts," he said.
A sight draft is a temporary voucher written by a wholesaler or finance company to a dealership, - and these fraudulent drafts allowed -the dealership to settle up with Ford Motor Credit after the audits.
Time drafts are similar to sight drafts in that the procedure for getting the shipping documents and other paperwork to the customer through the banks is the same.
Term options include cash in advance, documentary letter of credit, standby letter of credit, sight draft, time draft, and open account.