{"id":1122,"date":"2011-08-15T16:05:01","date_gmt":"2011-08-15T14:05:01","guid":{"rendered":"http:\/\/ourblog.greenwoods.org\/?p=1122"},"modified":"2011-08-15T16:05:01","modified_gmt":"2011-08-15T14:05:01","slug":"maritime-fraud-case-study","status":"publish","type":"post","link":"https:\/\/greenwoods.org\/maritime-fraud-case-study\/","title":{"rendered":"Maritime Fraud – (case study)"},"content":{"rendered":"

\"\"<\/a>THE SCENE<\/strong><\/p>\n

In this case, the insured shipment comprised readymade garments, which were sold by a shipper in Europe to a buyer in USA.<\/p>\n

The goods were sold on a \u201cCIF\u201d (Cost Insurance and Freight) basis. Freight was pre-paid and insurance was taken out by the shipper in Europe. Ten separate Certificates of Insurance were issued, for a combined insured value at 5 million Euros.<\/p>\n

The goods were packed into ten 40\u2019 containers. The containers were loaded onboard two vessels at a European port. Ten separate Bills of Lading were issued. The vessels proceeded to Rotterdam, where the containers were transshipped onto five vessels for onward carriage to New York.<\/p>\n

The vessels arrived at New York, and berthed at the Container Terminal. In every case, the containers were landed from the vessels shortly after arrival.<\/p>\n

The containers were uplifted from the port by privately owned transport, within one week of having been landed, and were delivered to an address outside New York, 50 miles from NY. The empty containers were turned in to the premises of various privately owned container depots in New York.<\/p>\n

A claim for the theft of the entire shipment was instituted by the shipper. Surveyors (Lloyd\u2019s Agents) were instructed by the Insurers some four months after the alleged theft had taken place.<\/p>\n

Surveyors\u2019 starting point was to establish contact with the purported buyer.<\/p>\n

THE USA BUYER<\/strong><\/p>\n

The buyer\u2019s premises were located in a small building situated within an industrial area near NY. The building was in a state of considerable disrepair.<\/p>\n

After some difficulty, contact was made with the owner of the company. He repeatedly refused to speak to Surveyors. However, after gentle persuasion, he eventually stated that:<\/p>\n

he had not ordered the goods in question, nor had he ever heard of or had any dealings with this particular shipper;<\/p>\n

1. the first time he had heard about the goods was when his bankers had contacted him and advised that they had received documents relating to the goods from the shipper\u2019s bankers;<\/p>\n

2. he had instructed his bankers to return the documents to the shipper\u2019s bankers;<\/p>\n

He refused to say any more, and referred to his lawyers. His lawyers refused to give any further information<\/p>\n

Although Surveyors were less than satisfied with his statement, they found no firm evidence during the investigation to suggest that he had taken delivery of any of the containers or goods.<\/p>\n

THE SHPIPING AGENT<\/strong><\/p>\n

Upon contacting the shipping line\u2019s agents, Surveyors were advised that they were not prepared to comment, or to provide any information whatsoever and further advised that the matter was in the hands of their liability insurers.<\/p>\n

THE BANKS
\n<\/strong><\/p>\n

Surveyors turned their attention to three local banks, which had been named as the Consignees on the various Bills of Lading. Assuming that original Bills of Lading had been presented to the shipping line\u2019s agents for release of the containers, it followed that someone must have paid for the goods in order to obtain the original Bills of Lading from the banks.<\/p>\n

The banks advised that the original Bills of Lading, Supplier\u2019s Invoices, Packing Lists and Certificates of Insurance had been returned to the shipper\u2019s bank.<\/p>\n

There had been a considerable exchange of correspondence between the banks and, apparently, the purported buyer, well after the containers had been removed. The correspondence related to requests by the purported buyer for extensions and\/or amendments to the terms of payment.<\/p>\n

We concluded that the shipping line\u2019s agents had apparently released the containers without production of the original Bills of Lading.<\/p>\n

THE CONTAINER TERMINAL<\/strong><\/p>\n

A Container Terminal Order (CTO) must be issued for containers to be released by the Container Terminal.<\/p>\n

During the investigation, meetings were held with the Administration Manager at the Container Terminal. He stated that to his recollection, all the CTO\u2019s pertaining to the containers in question had been issued by the shipping line\u2019s local agents.<\/p>\n

He was unable to provide to Surveyors with copies of the CTO\u2019s or indeed any other documentation relating to the containers. He explained that he simply did not have the documentation, that he assumed this had been taken by the Police in the course of their investigation, and that no copies had been left on file.<\/p>\n

He stated that the containers appeared to have been released in the normal manner.<\/p>\n

CUSTOMS DOCUMENTATION<\/strong><\/p>\n

The Bill of Entry is a Customs clearance document, which is framed by the importer or his agent and presented to Customs & Excise.<\/p>\n

The requirement for presentation of these documents is to prevent the release of containers before Customs duties have been paid.<\/p>\n

Surveyors obtained copies of the Bills of Entry issued in respect of the containers, and noted the following:<\/p>\n

Each Bill of Entry contained a Customs Export stamp.<\/p>\n

    \n
  1. The remover was shown as a company based in Med Port.<\/li>\n
  2. The Bills of Entry were signed, allegedly, by the USA buyer.<\/li>\n
  3. All the Bills of Entry were in the same handwriting and issued on the same date.<\/li>\n<\/ol>\n

    In discussions with representatives from the Department of Customs & Excise, it was confirmed to Surveyors that the Bills of Entry were fraudulent. Surveyors were advised that the Department was conducting its own investigation into the matter.<\/p>\n

    Surveyors concluded that the Bills of Entry had been fraudulently prepared and presented for the sole purpose of obtaining release of the containers from the Container Terminal in Durban.<\/p>\n

    THE ROAD TRANSPORT BROKERS<\/strong><\/p>\n

    In each and every instance, the instructions for delivery of the ten containers had originated from a single transport brokerage company.<\/p>\n

    The transport brokers advised that their instructions had been received from an individual who we will refer to Surveyors as \u201cMr X\u201d. The transport brokers maintained that the instructions had been given telephonically, and that they had never actually met Mr X. They also maintained that no written instructions had been received, and that the deliveries had been undertaken on a \u201ccash on delivery\u201d basis.<\/p>\n

    The transport brokers provided with copies of their individual instructions issued to sub-contractors who were, variously, other transport brokers or physical road transport companies.<\/p>\n

    This practice is quite customary. A transport broker will receive instructions from an importer or his agent, after which that broker may in turn sub-contract to another transport broker who will in turn sub-contract to the physical road transport company, each party taking his percentage at the various stages. It is not uncommon for five or six different transport brokers and\/or road transport companies to be involved in the collection and delivery of a single container.<\/p>\n

    The transport brokers produced a copy of a cash check for the amount of \u20ac 5.000,00 which was apparently given to them as payment for the delivery of the containers. The check had been presented to the bank and there was no cover.<\/p>\n

    The transport brokers advised us that they had subsequently met with an unknown party in a parking garage, and collected the amount of \u20ac 5.000,00 in cash, in a brown paper bag.<\/p>\n

    The transport brokers maintained that they had heard no more from Mr X after the deliveries of the containers had been effected. They supplied a mobile telephone number for Mr X. This was found to have been disconnected.<\/p>\n

    The transport brokers stated that, in their opinion, the goods were long gone, and had been sent exactly where they were intended to be sent.<\/p>\n

    THE SCENE OF THE CRIME<\/strong><\/p>\n

    Surveyors attended at the address to which the containers had been delivered. The address was that of a private house.<\/p>\n

    The owner of the house was interviewed. He confirmed that Mr X, who drove a red Porsche, had rented the house from him. Mr X had subsequently disappeared without having paid the rent, and also after having removed some of the more expensive fittings from the house.<\/p>\n

    The owner was also aware that at least one shipping container had been delivered to the house. Cardboard cartons had been removed from the container and stacked against the house. The cartons had subsequently been removed by a fleet of light delivery vehicles.<\/p>\n

    The owner confirmed having reported the matters of outstanding rent and theft of fittings to the Police.<\/p>\n

    POLICE INVESTIGATION<\/strong><\/p>\n

    Initial attempts to contact the two Police detectives investigating the case were unsuccessful. Surveyors were subsequently advised that following a disciplinary enquiry, both detectives had been transferred out of the Police unit responsible for investigating matters of this nature.<\/p>\n

    A special Police task force, financed by local business interests, had been set up with a brief to investigate not only this alleged theft but also various other similar and possibly connected thefts of containers. Surveyors met with detectives assigned to the task force.<\/p>\n

    They advised that container theft in USA, as in other parts of the world, was believed to be the work of organized crime syndicates, some with international links. Outwardly respectable businessmen, Customs officials and policemen were believed to be involved in the criminal activities of the syndicates.<\/p>\n

    The detectives advised that it would not be in their interests or to share any information with Surveyors. All the detectives were prepared to say was that Mr X was known to them, and was being sought by them in regard to the matter of the ten containers.<\/p>\n

     <\/p>\n

    RESTATEMENT OF FACTS<\/strong><\/p>\n

    It is clear from the following restatement of facts that the movement of the containers was orchestrated as follows:<\/p>\n

    1.The shipper appeared to have believed that he had sold the goods to a buyer in USA. Freight was prepaid and insurance was taken out by the shipper.<\/p>\n

    2. The purported buyer was intended to receive the relevant original documentation on a \u201ccash against documents\u201d basis, the original documents being held by three USA banks.<\/p>\n

    The goods were packed into ten 40\u2019 containers which were loaded onboard two vessels in Europe. The containers were transshipped onto five vessels at Rotterdam for onward carriage to USA.<\/p>\n

      \n
    1. The containers were landed at the Container Terminal in NY. The initial movement of the containers was controlled by the shipping line\u2019s agents.<\/li>\n
    2. The initial sale between the shipper and the purported buyer (if there was in fact a sale, which is doubtful) apparently fell through, and the shipper intended that the containers should be held in bond pending the re-negotiation of the sale.<\/li>\n
    3. During these negotiations, the containers were uplifted by various road transport companies and delivered to premises outside NY.<\/li>\n
    4. Fraudulent Customs documents were prepared and presented to the Container Terminal in order for the containers to be uplifted.<\/li>\n
    5. The original sale documents, specifically the original Bills of Lading, were never released by the banks. There was evidence to suggest that the shipping line\u2019s agents had released the containers without the presentation of the original Bills of Lading.<\/li>\n
    6. In every instance, the road transport instructions were issued by a single road transport brokerage, which was in turn acting in accordance with verbal instructions received from a Mr X. The deliveries were all undertaken on a \u201ccash on delivery\u201d basis.<\/li>\n
    7. There was no firm evidence to suggest that the purported buyer had received the goods. Similarly, there was no firm evidence to suggest that he was directly involved in the disappearance of the containers.<\/li>\n<\/ol>\n

      CONCLUSION<\/strong><\/p>\n

      Like all good stories, this one is open-ended.<\/p>\n

      Surveyors duly reported their findings to the Insurers, and were advised that they had retained the services of investigators in Europe to institute further enquiries at origin.<\/p>\n

      Surveyors heard no more from the Insurers regarding the case.<\/p>\n

      To this day, is not known if the claim was paid, but it is worth recalling the comment made by the transport brokers, who stated that:<\/p>\n

      \u201cThe goods are long gone\u201d.<\/p>\n

      \u201cThe goods were sent exactly where they were intended to be sent\u201d.<\/p>\n

      In conclusion, it is also worth recalling the advice of the Police detectives investigating the case, who suggested to Surveyors that they should exercise caution in their dealings with the various parties involved in this case.<\/p>\n

      That was sound advice, and I would commend it to the prudent Cargo Underwriter who is offered a risk bearing any similarities to the case discussed today.<\/p>\n


      \n<\/strong><\/em><\/p>\n

       <\/p>\n

       <\/p>\n","protected":false},"excerpt":{"rendered":"

      THE SCENE In this case, the insured shipment comprised readymade garments, which were sold by a shipper in Europe to a buyer in USA. The goods were sold on a \u201cCIF\u201d (Cost Insurance and Freight) basis. Freight was pre-paid and insurance was taken out by the shipper in Europe. Ten separate Certificates of Insurance were […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"_links":{"self":[{"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/posts\/1122"}],"collection":[{"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/comments?post=1122"}],"version-history":[{"count":0,"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/posts\/1122\/revisions"}],"wp:attachment":[{"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/media?parent=1122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/categories?post=1122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/greenwoods.org\/wp-json\/wp\/v2\/tags?post=1122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}