Millions wiped out in latest trading scam

1,000 dud cheques, 46 affected companies and losses beyond Dh8 million. That’s the trail of havoc left behind by the conmen

Dubai: Conmen posing as genuine dealers have struck again in the UAE. And this time – the 16th such case in recent years – their haul is an estimated Dh8 million at last count Wednesday morning.

The chilling reprisal of the now familiar scam comes just months after XPRESS reported how two phoney companies – Barnabio General Trading and Reliancee Group – swindled close to 100 trading houses out of millions of dirhams before disconnecting phones and shutting shops.

Xplore Fareast Marine used the same modus operandi (see box) to dupe as many as 46 companies — all first-time victims – just last week, leaving behind a trail of misery and over a thousand dud cheques.

“It is the same story with similar subplots,” said Nabil, who supplied Xplore – a company licenced for ships and boats maintenance services and trading – over 1,300 angle grinders. His Dh72,200 cheque bounced on October 6, the due date because of insufficient funds. A Dubai-based lighting company that supplied over 4,000 bathroom lights on October 5 lost Dh143,000. Their setbacks, however, pale in comparison to what a Dubai solar panel firm (Dh1.2 million) and a Sharjah textile company (Dh650,000) lost.

Operating from fifth and sixth floor offices at Bur Dubai’s Al Khaleej Centre, Xplore Fareast Marine staff — mostly young Indian and Pakistani men and women — went about buying everything they could lay their hands on against post-dated cheques.

Endless list

From an Ajman plastics company and a general tools trading firm in Sharjah to a hotel supplier from Dubai and pipe fitting company in Abu Dhabi, the list of companies hit by the scam is long. Many of these companies have been around for decades yet they all fell for the scam hook, line and sinker.

British victim Alexa (name changed on request) explains why.

“Their staff looked professional and the trading licence showed they were in business since 2009. They even had offices in Singapore and Hong Kong. There was nothing amiss until we discovered the scam and realised all this was just a charade,” said the businesswoman, who is now spearheading a battle to help the victims recover their losses. Police complaints have been filed and a joint civil case is being prepared.

Xplore’s office in Dubai meanwhile remain locked, and calls to their office numbers yield no response. Even their Hong Kong and Singapore numbers are unreachable as are the mobile numbers of all their staff.

“What baffles us is that everyone from owners and salesmen to drivers, deliverymen and even office boys have switched off their phones and disappeared,” said a trader who supplied electronic goods worth Dh100,000.

The Singaporean and Indian co-owners of Xplore reportedly fled the country days before their cheques could be presented. “Their timing was perfect. Not a single cheque was due before October 6, the day when the scam came to light,” said a man whose company supplied welding electrodes, polypropylene straps and sling packing film worth Dh196,000.

In recent years conmen, possibly from the same gang, have struck at least 16 times using dummy companies as fronts. At least five cases have been reported this year alone. In May, Reliancee and Barnabio duped nearly 100 companies between them, wiping off over Dh15 million from the market. In April Al Shikha and Priyanka left a trail of 40 victims swindling them of at least Dh5 million and in February S.R. Global vanished with another two millions. No one has ever been caught.

 

Anatomy of a scam: How Xplore went for the kill

# Opened office in Bur Dubai’s Al Khaleej Centre and set up website detailing company profile and global locations in Hong Kong and Singapore.

# Armed with trade license and related documents, approached companies for trade enquiries.

# Made first few purchases in cash and current cheques to gain confidence.

# Placed big orders for just anything that they could buy (flight tickets, hotel bookings, electronic goods, textiles, industrial equipment) against post dated cheques.

# Sold goods for cash at throwaway prices to third parties

# Before cheques could be banked, switched off phones and fled with all the cash.

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