1. Fraudulent activities 2017

2. Undercover scammers from HSBC

3. Measures of documentary fraud prevention


Fraudulent activities 2017

We need to inform you in order to prevent scamming in finance.

According to the interests of a client from Nepal, whose interests are represented by our company TCC, an agreement was signed for the issue of SBLC leasing from HSBC UK for a total face value of 50M.
Head of Loan Hunter Limited Reg. (company number 05513839) United Kingdom was addressed by Mrs. CAROLINE DANIELS c UK who is the director of CAROLINE ANGEL LTD (company number 07511022) company registered in the UK and she has a direct mandate of the provider.
Our client TAEYANG HEAVY INDUSTRIES CO. LTD from Nepal, paid transmission fees for the transfer of the Pre-advice MT 799 from HSBC to the beneficiary's bank Laxmi Bank Limited Bank in Kathmandu, Nepal. The contract was concluded at July 11, 2017. On the part of the provider Loan Hunter Limited at July 11, 2017, IRREVOCABLE CORPORATE REFUND UNDERTAKING was granted as a money-back guarantee due to default on the contract (in the case of non-delivery of the Pre-advice MT 799 and MT 760).

As at 8 August 2017, the provider of Loan Hunter Limited Reg. (company number 05513839) did not fulfill its obligations. According to the CAROLINE DANIELS director CAROLINE ANGEL LTD, who is the direct mandate of the provider, keeps paid transmission fees paid by the client on her account.
At the same time CAROLINE DANIELS requires additional co-payment of the reason of stating changes in a procedure.
CAROLINE DANIELS categorically refuses to return money to the client as provided by IRREVOCABLE CORPORATE REFUND UNDERTAKING within 3 days.
We reckon about that Mrs. CAROLINE DANIELS is scammer according to the information above.

CAROLINE DANIELS ignores all the requirements from our company as well as the customer's request for a refund because she didn’t fulfill the obligations according to the agreement.

CAROLINE DANIELS just laughs about the client’s intention to make a report to the police regarding the fraud fact.
It is not excluded that this person hides a representative of Lithuania or Africa, which is already evidence of fraud.
This information is provided in order to counteract the manifestations of fraud in the UK, which Scotland Yard police are not engaged in, whose direct responsibilities should be included.

We ask everybody who had deals with CAROLINE DANIELS or Loan Hunter Limited Reg. No Country 05513839 from the UK, we ask you to contact us immediately to join efforts to fight scammers in the UK, as well as for collective appeal to Interpol due to inaction of Scotland Yard.
Also we invite to collaborate with us lawyers in the field of criminal law the UK to fight fraudsters in finance.


Undercover scammers from HSBC

We would like to inform that we were found another group of scammers in the head of MARC MOSES  who claims himself like Executive Director and Group Chief Risk Office.

This group of scammers includes the company PYROTECH RESOURCES CORPARATION managed by scammer Marc Moses with the director FRANCOIS BRAVO FERRER.
The group of fraudsters convinces clients to make a payment for the transferring of MT 799 and MT 760 for purpose of issuing financial instruments.
For the acquisition of advance payments, this group of scammers is even ready to provide their personal GUARANTEES and also accepts payment on personal accounts which opened in the banks of USA and London on fake passports.
We ask all staff of the financial market to be vigilant in communication and especially cooperation with this group of scammers. 


Measures of documentary fraud prevention

This section discusses some practical examples of fraud involving documentary tools, as well as suggested ways to combat with fraudsters.

International trade because of its features (large distances between partners, different laws, different language, in many cases, complex organization of transport of goods, etc.) is a very tempting for fraudsters field activities. Their activities facilitate modern means by which you can simply make the necessary documents. In addition, the implementation of fraud promotes basic human desire to get rich in a short time.

The total financial losses in the world related to fraud, could not be assessed, especially since the significant part of them are not reported. However, the crisis only promotes fraud. Faces of fraud are diverse, and only some of them are relevant to documentary transactions involving bank guarantees and documentary credits. Despite the variety of scams that exist in the world, they have one thing in common - fraudster uses gullibility and greed of the victim. Usually at the beginning of the fraudulent transactions there are "tags" or warning signals that can immediately alert the potential victim as something is wrong. However, often such signals are ignored by the victim. At this moment the victim counts fantastic profits. These alarms can be:

- Proposal of delivery of commodities at an unusually low price of the company with which the victim had earlier transactions, and about which the victim doesn’t know;

- Supply of commodities that are in high demand, but the offer is limited;

- Require of unusual payment terms;

- The use of names that resemble, but are not the names of famous department stores;

- The use of pressure for quick agreement on the proposal and on the letter of credit.

In addition to paying attention to warning signals, potential victims can take several steps to avoid falling into the trap of scammers. It can be:

-  checking of the data on the seller through banks, embassies and other trade sources;

-  a request of complete set of documents of title to the goods to provide the letter of credit;

-  the provision requirements of providing performance guarantee from the bank of the supplier;

-  a requirement for issuing certificates of inspection, analysis, weight to independent third parties;

- checking of the ship assigned to transport, whether it has a load capacity and the ability to transport a particular cargo, whether it will go to the named port of loading;

- organization of the trip of ship inspector in the port of loading to check the cargo and oversee the loading. Also (if it is required), the ship's officer may remain on board the vessel at the time of shipment.

It should be noted that a number of supply contracts, for example, sugar, cement, that scammers offered to sign, present a performance guarantee (though the 2% of the monthly party), and certificates of inspection, although in the context of the contract, they do not change it fraudulent nature.

The facts show that the false shipping documents are made by persons of insiders level who worked in the shipping company, and similar organizations. Therefore, banks can be difficult to identify fraudulent documents, because by their appearance, they look similar to the documents submitted to the present transactions. It is recommended to regularly comprehensive checks on all customers, old and new, as well as to conduct independent verification of parts shipments.

Though it is necessary to admit that the fraud occurs with some letter of credit transactions, but the consequences for the victim can be simply disastrous.

If the victim is still hurt, he or she is trying to recoup their losses. If the fraudster has disappeared, the victim tries to repair the damage to the insurance company, but if the goods never existed, insurers never pay damages to policyholders. Banks are also the aim of claims of fraud victims: they could be charged with negligent inspection of documents under the L, if the client can find differences, which the bank didn’t inform (during the period referred in Art. 14 (b) UCP600). Customers usually prefer to forget that the seller-fraud was found by them. In addition to careful examination of documents under letter of credit for the bank to scrutinize the deal yet at the stage of credit products.

In assessing of the credit risk and credit approval of the transaction it is necessary to pay attention to the nature and history of the client's business, including any recent changes in the ownership and management of the company, a major trading partner. Credit lines should be provided, taking into account the needs of the borrower's business, the value of collateral and repayment history. The request for a sharp increase in the credit line in a short period of time should be carefully considered. Also sharp increase in the balances of letters of credit should be carefully monitored. It will be useful to visit the office or factory borrower to ensure that the business and production are normal and they can cope with growth.

Banks should avoid entering into letters of credit transactions with unusual conditions, such as in cases where the nature or volume of the goods is not ordinary, maturing bills too long, the documents required for payment, are too simple and easy to forge. It is necessary to verify the authenticity of the letter of credit. For letters of credit for large sums in the case of doubts, it is necessary to check the shipping documents before payment. If it is possible, to check the vendor on-site, inspection certificate shall be issued by the independent inspector's companies.

If the beneficiary of the letter of credit is not a well-known company or a bank doesn’t know the beneficiary, the bank will have to be extremely careful with the relevant discounting of bills and effect negotiation by sending the documents to the issuing bank. 

An effective way to ensure the financial interests of the bank is also the order of registration of the bill of lading issuing bank (to the order of issuing bank). In this case, the customer cannot meet its obligations to pay the bank reserves the right to dispose of the goods, in order to avoid significant financial losses. However, this method would make sense if the bank is confident that the bill of lading is genuine. It is necessary to say that the above mentioned measures are not exhaustive. Asproverbsays, thereisnolimittoperfection.

Losses for banks

In most cases, documentary fraud banks somehow bear the loss. The least - Fraud makes the tension in the relationship between the bank and customers or correspondent banks on a letter of credit transaction. The biggest danger for the banks - this is when they finance transaction in which fraudsters pass for real large-scale trading operation scheme, involving bogus buyer, the seller and the carrier. To achieve the ultimate goal, theft of large sums, fraudsters gain the trust of a long time and cause interest from banks, conducting actual payment, increasing the amount of contracts, paying substantial bank fees. As a result of these actions it is dulled the vigilance of bank employees who are responsible for documentary operations. If there is any doubt about the authenticity of the documents they are feeling the pressure from the management of the bank, who does not want to lose potential customers.

Is a case of fraudulent schemes, implemented under the guise of a trading company LONECO UAE, which killed a number of European and Middle Eastern banks have lost the whole $ 400 million U.S.. The main calculation was made of the fact that by winning the trust of banks, LONECO can avoid detailed analysis of falsified documents. For this purpose for several years fraudsters organized a network of controlled companies’ sellers, buyers and carriers, which produced documents showing a significant amount of trade conducted LONECO. The diversity of the involved companies gave the impression of real trade, and in order to ensure its banks are put uncovered letters of credit for large sums.

Fraud was that LONECO has signed contracts with ghost companies to supply the UAE inexpensive metals: lead and tin from Sweden from Malaysia for a total of 30 thousand U.S. dollars. Trucking companies have written false bills of lading, which indicated as cargo alloy of silver, indium, tantalum concentrate and other expensive metals. For each shipment of inexpensive metals were issued four sets of false bills of lading, the total value of which amounted to 400 million U.S. dollars. The documents were put into four different banking channels. The banks did not know of the existence of the same sets of documents relating to the same shipment. Using conquered the banks trust; LONECO achieved issuing unsecured letters of credit in favor of the company’s sales with deferred payment for 120 days. Performing banks have been instructed to discount the future cash for letters of credit, to make payment immediately upon receipt of documents, less a discount, in order to get one hundred percent reimbursement from the issuing bank at maturity. Received the payment for goods in transit, the fraudsters disappear.

Another example, is quite different in effect, the Bank of England financed the supply of chemicals from the UK to Nigeria. In this case, the bank has decided not to finance trade with Nigeria. Then the trading company based in the UK begins to present documents, which show that now it is exporting goods to Switzerland. Companies are given even more credit limit. But the bank does not know that the goods are still exported to Nigeria, and presented false documents to show that the product is going to Switzerland. This product is sold in Nigeria, and the proceeds remitted in Switzerland for the calculation of shell buyers to the company. This scheme worked for many years until bank stopped working in Nigeria, which was the holder of funds. Cash flow from Switzerland stopped and there were not able to transfer the money to London. After the attempted investigation revealed that for many years the Bank has funded a non-existent transaction.

The fact that during Letter of credit, banks make payments only against the relevant description of shipping documents is attractive for individuals interested in laundering illicit funds. Being received as revenue in the supposedly real trading, illegal means of acquiring "the trade mark", which facilitates the initial cycle of washing.

In order not to attract attention of the bank to its transactions, criminals tend to use as a cover for the real companies that have long-term relationships with banks. For this purpose they choose retailers who are experiencing financial difficulties, and offer them significant investments in exchange for that part of the organized criminal financial flows will go through established by banking channels. The calculation is made of the fact that the bank will not cause suspicion, if tested by the financial turnover increases by passing through a bank of trained criminals false documents.

International Maritime Bureau (International Maritime Bureau) of the International Chamber of Commerce has investigated a number of cases, in the early 90's the company from the former Soviet Union under the pretext of development of large-scale trade well-known companies involved in the operation to launder illicit funds.

The shape of these operations look like trade between Western companies and firms from countries of the former USSR, but they did not mean the physical movement of goods, but only pay for shipping documents submitted. As a form of payment used letters of credit, the list of submissions was very simple and included copies, not the originals bills of lading. Western banks, not knowing that they engage in illegal activities, to verify that the documents submitted the letter of credit and make payments, assuming that the real trade finance operations.

As a result, criminals received from abroad "net" revenue on exports and, in turn, converted the "dirty" cash in hard currency to pay for the import contracts.

Faces of fraudster are diverse. And often, the bank employee is difficult (if not impossible) to see the documents of reality. Yes, banks are checking documents under letters of credit for their appearance. This is the only practical way for the system of documentary credits. The level of fees charged by banks for this service and does not assume more responsibility. However, since the credit is a tool to finance foreign trade transactions, for its own benefit the banks know exactly what kind of activities they fund, before joining the transaction. This requires knowledge of the bank's employees not only the rules of documentary operations and ownership of more extensive information on foreign trade. In addition, banks should have internal procedures in respect of letters of credit, the purpose of which is to ensure adequate internal controls and preventing losses from fraud.

In addition, it is necessary to note that all the dangers lying in an honest man in predatory business world, this section cannot be enumerated.

We shouldn’t go the limit and see every potential client as a fraud. After all, the majority of commercial transactions are carried out between honest buyers and sellers.