This scam was quite elaborate but guaranteed success many times over and it involved a delivery of a (non-existent) large order of steel from Asia to Europe.
A man with perfect and in-depth knowledge of the steel market calls an Italian, French or German company manufacturing products which require huge quantities of steel: usually big construction companies, large pipes manufacturers, etc. This is an industry with fierce competition and razor thin margins where companies are fighting every day to catch some lucrative business.
The gentleman claims to be the representative for Italy / France / Germany of a Swedish company called XYZ Ltd which works in the metal business (there is fake website arranged with fake phone numbers, fake registered office, etc.).
The gentleman knows in depth what he is talking about, he shows connections with other big and international companies in the steel market, has worked with this and that guy, he has been in the business more than 30 years, etc. etc.
The gentleman offers to negotiate a large scale delivery of steel for a large (but not “impossibly large”) discount from a big and well known steel company either in South Korea or China as long as the purchaser was willing to pay 100% of the (discounted) purchase price upfront.
We are talking about an order of a few million USD of steel.
All communication was done by fax or by e-mail attaching other faxes, letters, documents, quality certificates, etc.
The whole communication from the Korean or Chinese companies was totally forged with fake email addresses and fake phone numbers.
In order to prevent any scam, at the moment of purchase the parties exchanged the money paid with a First Demand Bank Guarantee issued by a well reputed European Bank: by holding the original of the Bank Guarantee the buyer was 100% safe that if the metal was not delivered they could go to the Bank and ask for the money back without any exception whatsoever (this is standard practice for large scale contracts among big players). Please note that this required the scammers to have a bank account with the bank and deposit there at least an amount of money equal to the value of the Guarantee the Bank was going to issue (i.e. these guys were professionals with millions of USD at their disposal).
At the moment of exchanging the guarantee the parties met at the Bank’s premises and, with an excuse, the scammers were able – almost like magicians – to take possession of the original of the Bank Guarantee (which was supposed to be in the hands of the buyer the whole the time) and while people were amiably chatting about the steel market, they changed it with an almost identical color copy (they kept the original and gave the buyer’s representatives the color copy) under the eyes of the Bank’s and the buyer’s representatives. Keep in mind that this was done at the Bank’s premises, so this required amazing manual skills, speed of execution and cold blood.
Delivery of the steel was supposed to happen in 60/90 days from the exchange of the price with the Bank Guarantee.
24h after the exchange, the scammers went back to the Bank handing back the original of the guarantee and claiming that performance had already occurred so there was no need for the guarantee anymore.
Once received the original of the Bank Guarantee, the Bank immediately cancelled it (and the underlying obligation protecting the buyer vanished) thus releasing the money deposited by the scammers in the bank account.
The buyer remained in contact with the (fake) representative of the Korean and Chinese companies for a few weeks: after a month or so they stop answering the emails and phone calls.
Immediately the buyer realized that maybe there was something fishy.
After some further investigation and realising that even the Swedish intermediary company has now disappeared, they decide to rush to the Bank and request the payment of the Bank Guarantee.
The Bank confirms that the Bank Guarantee has been already cancelled 24h after being issued by returning the original document of the Guarantee that was now in their hands.
The parties compared the two versions of the Guarantee and realise that the one in the hands of the buyer was just a well made color copy of the original in the hands of the Bank.
In the meantime the scammers had all the time to transfer the purchase price to various bank accounts in Switzerland and then Cyprus and then elsewhere leaving no trace.
