The Romanian bathrobe buyers in Greece

by IA group

Our client, an export credit insurer, entrusted IA with an investigation into the claim of one of its policyholders in China. The policyholder had a debtor who refused to pay an invoice of USD 135.000.

Our investigation started with a detailed look into the invoice, the goods sold, and the debtor’s identity.

The insured party was a manufacturer of ladies’ bathrobes and pants. This company sold goods to a Romanian company, who wanted the goods delivered to the harbor of Piraeus, Greece. The agreed payment terms between buyer and seller were USD 1.000 to be paid as a deposit and the remaining balance against a copy of the bill of lading. The Romanian company indeed paid the first USD 1.000. As the seller delivered the goods, the buyer requested to release them against the promise to make the payment within three months. The policyholder reported this to the export credit insurer, IA’s client.

IA’s representatives in Greece started an investigation into the identity of the buyer company through the Trade Registrar and via public sources. IA made a call to the buyers. Although the company was registered in Romania, nobody was able to speak the Romanian language.

Due to the many odd facts, IA’s investigation team treated the case as suspected fraud.

To establish the authenticity of the buyers, IA’s investigative team requested the buyers to provide a written document with a signature and stamp. This document proved that the address mentioned was incomplete and that the stamp did not comply with Romanian law. In addition, the buyer’s name, as noted on the stamp, was slightly different from the buyer’s name registered in the Romanian Trade Registrar. IA requested the buyer to provide the company’s Registration Certificate for further investigation. The certificate received was found to be false due to the following: (1) spelling mistakes, (2) the format of the stamp was not compliant with the law and, (3) the signed signature did not match that of the actual company director. A thorough investigation proved that the Registration Certificate provided was downloaded from the internet and changed details to make it look like the company’s certificate. It was clear that the buyers were using another company’s name as their own.

IA’s investigators located the actual company that allegedly ordered the goods. They denied having placed the order and confirmed that the signatures and the stamps applied on the trade documents were false.

In the meantime, IA was in constant contact with the shipping company to verify any costs considering the Romanian bathrobe buyers had not collected the goods. IA advised the seller not to release the goods without payment, suspecting that the fraudulent buyers would disappear if they were delivered to them without paying first.

IA’s local lawyer from Greece contacted the fraudulent buyers to get them to pay and thus minimize the losses otherwise suffered by the seller. When the buyers realized that they could not collect the goods without payment, they disappeared, leaving the goods in the harbor of Piraeus.

At this point, the seller was left with two options:

  • take back the goods
  • abandon the goods

Because the high demurrage costs to be paid (approx. EUR 30.000) and the costs to return the goods were also very high, IA advised the claimant to abandon the goods and let them go up for auction.

The export insurance company paid out the claim to the policyholder and managed to recover some money through the auction of the goods. While the fraudsters got away, at least they failed to lay their hand on the shipment of bathrobes and pants.