A trading scam that recently hit the city of Dubai left a trail of havoc behind. More than 1,000 fake checks resulted in losses of US$ 2.18 million (Dh8 million) for 46 companies located in the UAE. Most of the companies that have been hit by the scam have been operating in Dubai for decades, but they fell to the bait set by the fraudsters hook, line, and sinker.
Operating from an office in Burj Dubai, a company that had registered as Xplore Far East Dubai used dud checks to buy good worth millions of dollars from various companies such as Ajman plastics firm in Sharjah, pipe fitting company in Abu Dhabi, and a Solar panel company in Dubai.
Background of the Million Dollar Trading Scam
The trading scam committed by Xplore Far East Dubai is the 20th such crime in the UAE. The latest trading scam, just two months after two fake companies – Reliance Group and Barnabio General Trading – deceived more than 100 trading firms of millions before disconnecting phones and disappearing out of the country.
All the scammers use the same modus operandi. They pose as legitimate buyers, purchasing a few goods at first to gain the trust of their suppliers. Afterward, they give out post-dated checks to order a large number of goods, and finally, sell them at throwaway prices to third party firms. Before the checks are banked, they quickly turn off the phones and flee the country.
The same tactic was used in the recent trade scam conducted by Xplore Fareast Dubai leaving behind a trail of misery for dozens of companies. It looks like a storyline of a film with the same scripts but different casts. However, this time around the setting was more urbane.
An Ajman based cleaning equipment supplier had said that the conman had made payment of Dh30, 000 in full, but then they placed a three times bigger order. The company had made the delivery based on trust that was built on the first transaction, but it backfired.
The sales manager of another company that had delivered 430 items worth Dh 60,000 on the night before the dud check was due said that the damage could have been much larger if the company had followed through the initial order of 2,000 items.
All the victims said that the charade of Xplore’s staffs was so convincing that they had no way of telling they were pulling the wool over their eyes. The purchasing manager of the company was well spoken and he even showed the details including an Emirates ID. It was only when the staffs at Xplore failed to answer the calls after the checks had bounced did the duped companies realized about the magnitude of their losses.
Criminals Getting Away with the Booty
The authorities were successful in tracing the sold goods to two warehouses in Dubai. However, the local court rejected the application of the companies to stop the goods from being shipped due to lack of proper evidence.
The owner of the warehouse had said that the stolen goods were bought legally from a third party firm, which probably bought the goods from Xplore. So the companies can’t do anything to reclaim the goods.