Coordinated checks aid fraud detection
The ICC International Maritime Bureau (IMB) has reported a spate of cargo frauds last year targeting different banks but with common characteristics.
Each theft involved fraudulent documents containing many similar mistakes. The frauds were not immediately identified, since the different banks were not aware of the related fraudulent transactions and the links between them.
to the head of IMB Information Services, Sam Mwedekeli: “Such attempted
‘fraud by numbers’ scams rely on timing and count on the fact that banks do not
generally share information with each other. This lack of coordinated data
increases the chances of success for the fraudsters even when, as in these cases,
there are large and glaring mistakes in the documentation.”
summer, a bank based in Israel asked the IMB to investigate a urea cargo fraud
perpetrated against it. The IMB found the documentation contained a number of
basic errors that would have quickly identified the fraud. However, the errors
were not picked up until after $1.6 million had been paid against a letter of
credit. In addition to the unusual origin of the cargo and a misspelling of the
carrier’s name on the bill of lading, the most obvious mistake was that 12,500
MT of bulk cargo was allegedly loaded onto an 186GRT tug.
fraud perpetrated at another bank at approximately the same time, used a
matching modus operandi and documentation. Another cargo of urea was involved,
allegedly bound for an African nation this time.
the same time, the IMB also identified two other shipments of steel from
Ukraine to UAE and Vietnam respectively where the goods did not exist. The
documentation described the break bulk steel cargoes as being loaded on
container vessels that were not in fact docked at the stated loading port. In
each fraudulent scheme the bills of lading employed used the same fake stamp
and style of font, sufficient proof to link each scheme to the same group of
frauds, noted Mr Mwedekeli, highlight the multiple benefits of working with
organizations that specialize in investigating financial transactions and
network closely with a number of banks. “The IMB verifies a large number
of trade finance documents from around the world. We are well positioned to
identify such scams and raise the appropriate alerts,” said Mr Mwedekeli.
commented: “The more information banks provide to crime prevention
experts, the quicker a repeat scam becomes apparent. Experts can readily
identify trends in fraudulent activity and can warn financial institutions of
what to look out for before any funds are committed. This kind of protection
saves financial institutions from shelling out significant funds in respect of
Mwedekeli added: “One benefit of IMB membership is the immediate alerts
that members receive after evidence of such a fraud comes to light. This
service proved quite valuable to two of the banks targeted in this scheme
already holding IMB membership. Unfortunately, the other banks were not able
avoid these frauds.”