Trading scams-1-1578745183397
Con artists masquerading as purchase managers approach businesses for trade Image Credit: Getty Images/iStockphoto

Dubai: What could saffron, electrical cables, frozen chicken, play stations, A4 papers, rice, cashew nuts and smartphones have in common?

Nothing except that nearly Dh25 million worth of these items have been stolen in the umpteenth trading scam to have hit the UAE since 2016.

Using methods they have successfully employed in the past, fraudsters launched a website and fancy office in Dubai before approaching local businesses — this time on behalf of their firm Triumph Fortune General Trading LLC.

NAT SCAM FIRM  TRIUMPH  NO 1-1578745176883
Triumph Fortune General Trading When: November 2019 Operated from: Atrium Centre, Bur Dubai Stole: Cashew nuts, saffron electric cables, frozen foot items, play stations, A4 papers, rice, Samsung phones, iPhone accessories Amount: Dh25 million Image Credit: Supplied

Like always, initial purchases were made in cash. Once the con artists had gained the trust of traders, Triumph ‘marketing managers’ made bulk purchases against post-dated cheques which later bounced because of insufficient funds. By the time panic-stricken suppliers rushed to Triumph Fortune’s office in Atrium Centre, Bur Dubai, its owner and his entire staff had scooted off with the bounty after switching off their cell phones.

One company lost cashew nuts worth Dh1.8 million. Another firm that supplied five containers of rice pegged its losses at Dh400,000 while a third reported losing stationery worth Dh625,000.

Long list

With its abrupt closure in November 2019, Triumph Fortune has now added to the list of roughly 200 trading companies which have similarly downed shutters over the past three years. Each of these firms were started or taken over by con artists with the specific purpose to defraud. Among them are Al Rawnaq Al Thahbhi (Dh15.37 million, 2019), Marine Bunker Shipping (Dh20 million, 2018), Avon Line Electronics (Dh25 million, 2018) Black Star Electronics (Dh20 million, 2017), SR Global (Dh35 million, 2016) Explore Far East Marina (Dh30 million, 2016), Reliancee Group (Dh20 million, 2016), Brazza Trading (Dh10 million, 2016) Between them they have wiped out billions of dirhams from the market, destroying thousands of lives in the process.

Al Rawnaq Al Thahbhi General Trading When: July 2019 Operated from: XL Tower, Business Bay , Dubai Stole: 250 containers of rice, spices and coconut from Indian exporters Amount: Dh15.30 million Image Credit: Supplied

Tip of the iceberg

Yet many business owners reckon this is the tip of the iceberg. “In many business neighbourhoods of Dubai, one out of every five trader has been the victim of the scam at some point. Many scams go unreported,” claimed the owner of a hardware store in Deira.

Weighed down by these setbacks, several businesses have folded up. “We had no choice,” said a Chinese expat, who wound up his shop after being duped off Dh500,000 by the dodgy Reliancee Group. A mother of two who started a business when her paralysed husband lost his job said she is facing jail because of a company which vanished with electrical goods worth Dh400,000. “I have no money to pay my creditors; they are threatening to file a case against me,” she said.

Marine Bunker Shipping LLC When: May 2018 Operated from: Platinum Business Centre, Al Nahda, Dubai Stole: Construction and building material, weighing scales, caustic soda, Sony projectors, 100 cartons of Panadol tablets Amount: Dh20 million Image Credit: Supplied

Who are behind the scams?

Organised crime networks comprising around 300 individuals, including women, are behind the recurring scams, according to a Gulf News investigations. These gangs are led by seven longtime UAE residents who stay in the shadows, building smuggling and distribution channels through India, Pakistan, China and the Far East, without leaving so much as a fingerprint. The initials of some of these masterminds were published in a story by a Gulf News publication in 2017.

So why haven’t they been caught?

If we have identified some of the ring leaders, then the corollary question is: why haven’t they been arrested? The answer is simple. The gang leaders don’t leave any evidence which could be held against them in court. They know the loopholes in the law and exploit it to their advantage from behind the scenes.

For starters, they never put their names on the trade license of companies, instead, they use pawns to front them. In one case, a cafeteria waiter was made the CEO of a trading firm. In another instance they made do with a mason. Before the scam could come to light, the front men are paid off and whisked out of the country along with other key gang members.

“Everything is meticulously planned,” said a former gang member who acted as the sales manager for the fraudulent Explore Far East Marina.

“Once all those who could be tied to the crime are out of the picture, our boss steps forward to share the spoils. The ill-gotten goods are moved to different rented warehouses from where they are either sold locally at dirt cheap prices or shipped outside the country,” he explained over the phone from Pakistan.

Around 90 business owners were left counting their losses in 2016 when Explore Far East Marina shut its Al Khaleej Centre office in Dubai.

Once bitten twice shy, traders are now treading with extreme caution. Deals with new firms are a strict no-no. Credit facilities to clients have been withdrawn and thorough background checks have become the norm.

“The rules of business are being rewritten in the UAE. We don’t trust anyone,” said Dubai-based trader A.K. who was conned into selling Dh3.5 million worth of steel plates to a bogus firm against cheques which turned out to be duds.

Indian exporter Vipin Goel who supplied rice Dh1.2 million of rice to Al Rawnaq Al Thahbhi in July 2019 said he has stopped dealing with new UAE-based companies.

“It’s cash or nothing,” said another exporter who lost red chillies worth Dh130,000 to an Ajman-based company H & MZ Global in August 2019.

“There is fear in the market. Trust used to be the hallmark of business in the UAE. But that’s not the case now. We don’t accept post-dated cheques now. Even those who did have stopped doing it since the new rule under which bounced cheques under Dh200,000 don’t result in a jail term,” said a wholesale dealer in Dubai.

Call for stricter rules

The seemingly unstoppable scams has also intensified calls for stricter rules. Traders said their main grouse is that the police treats their cases as bounced cheque cases instead of organised crime.

“Until there is a change in approach, such scams will continue,” said one of them.

Traders are also seeking a law to prevent sale of stolen goods. “Our stolen LED lights were bought by another firm for one-fourth the price and there was nothing I can do about it,” recalled S.M. who dealt with a company called S.R Global.

Modus operandi

  1. Gang leaders use frontmen to launch companies with fancy office and website. Fake credit references are given, dodgy audit reports shown to gain credibility
  2. Con artists masquerading as purchase managers approach businesses for trade queries
  3. They make first few purchases in cash or current cheque.
  4. Trust gained, the con artists place bulk orders against post-dated cheques
  5. Before the cheques are found out to be duds, gang masterminds fly the dummy company owners out of the country and sell the stolen goods at throwaway prices

In numbers

515,000 cheques valued at Dh26.7 billion bounced in the UAE in the first five months of 2018, according to UAE Central Bank.

Dh1.8 million worth of cashew nuts is what a trader lost to Triumph Fortune General Trading in November 2019

200 approximate number of trading firms that have disappeared with stolen goods since 2016

What are the con men after?

Anything they can get their hands on, but their favourites are food stuff, electronic goods, home appliances, industrial equipment, hotel stays and international flight tickets. There’ve been also instances of con men buying 5,000 goats, theme park tickets, drones, hundreds of cartons of Panadol and 12,000 bottles of antiseptic liquid Dettol against post-dated cheques. In July last year they purchased 6,000 tonnes of rice from various exporters in India.

What traders want

Bounced cheques in these cases be treated as organised crime and strict law to prevent reselling of stolen goods

Could this be the most unlucky sales manager ever?

If there was a title for the most unlucky employee in the UAE, Indian expat D.R. would win it hands down. Every company he has worked for lately has disappeared after stealing goods. Each time the father of three has feigned innocence. But this time he seems to have run out of luck. D.R. is in police custody since last month for his role as manager at Triumph Fortune General Trading which accused of cheating over two dozen business owners out of Dh25 million. Intriguingly, the long time UAE resident was also the manager of the equally fraudulent DKC Electronics and Omar Al Kaissi General Trading both of which were based in Dubai.

In 2011, D.R. was in China where he was employed as the purchase officer for Euro Global Trading International Limited which bought goods worth Dh5.5 million from local suppliers against post dated cheques. The Chinese traders were certain D.R was behind the scam. So they kidnapped him and kept him hostage for 17 days. The story made headlines in India and prompted the Indian embassy in Beijing to intervene and secure his release. Shortly after that D.R moved to the UAE.