I have a friend who works in a take away. His boss is trying to sell his take away shop. However, he find it difficult to sell the shop because he ask a high price. Now, the boss ask my friend to take a loan from the bank and to buy his shop. The procedure is like this:

my friend is a chinese not English. The boss said he will ask someone to estimate his take away shop higher than the actual value. e.g 250,000 pounds but might actually only worth 150,000.

and then ask my friend to take a loan of 250,000 from the bank by buying his take away shop. Once my friend get the money, my friend will cash the money out of the bank give to the boss. After this, he will give my friend between 30-50,000 pounds as compensation.

because my friend is chinese and going to go back to china in July 2007. Before he goes, he will give the shop to the bank as he doesn't have enoght money to pay back the bank. It is like he goes bankrupt. But the shop might only worth 150,000 pounds rather than 250,000 the original borrowing amount.

my friend wants to know whether there is an illegal dealing from this? Is this seems a money laundry? If this is illegal, what is the possible effect could be cause to him?

Thank you very much for any provide the help by answering this question.

look forward hearing from anyone soon

Hello xia:

No, it isn't money laundering. It's bank fraud. But, when you're sitting in jail, it doesn't matter too much what they charged you with.

excon

It's blatant fraud! Of course it's illegal! If he tries to do it, no savvy banker will loan him the money because he'll see that the business is overvalued.