Sunday, November 16, 2008

China scam - Travel to China to sign contract!

Today I got a call from a friend who told me about a new scam originating in China whereby they appear to be interested in your product, negotiate a deal of several hundred thousand dollars, and then insist that you go to China to sign the contract and pay a 1% Chinese notary fee!

It’s an interesting variation of the 419 scam, and I recently investigated a “too good to be true” deal for a friend. Things got weird when they asked him to come to China and sign the contract!

In this case, I was informed that the company was “China Shijiazhuang Shenzhouyilong Trade Co., Ltd”, and the scam was that they pretended to be interested in a large order, over $100,000.

China Shijiazhuang Shenzhouyilong Trade Co., Ltd, has a web site is with a Google page rank of zero.

Any site with a Googfle page rank of zero is a sign of either a brand-new web site, or a site that has been punished by Google. In this case China Shijiazhuang Shenzhouyilong Trade Co., Ltd represented themselves to be an established company, so this was suspicous.

A few Google searches and I discovered why this Chinese fraud requires you to travel to China! According to this web site, this travel to China fraud has been going on since at least 2006:

“There were reported cases of gullible Americans who actually took a trip to Africa to "sign the deal", and were robbed and murdered, but most of them got off lucky with their lives - their back accounts were though emptied.”

New Zealand authorities are also warning about a scam very similar to that of China Shijiazhuang Shenzhouyilong Trade Co., Ltd:

“A recent variation came through an internet-based enquiry from distributors based in South America working with Chinese buyers looking to import a New Zealand Company’s products and/or services and inviting the potential exporter to visit them to sign contracts.

Key features of the enquiries are that the companies want to place large orders, claiming to focus on quality not price, and agreeing to all general terms of trade. In addition they request that the companies, according to Chinese custom, travel to China to sign the contract.

They have also, of late, started asking for a 1% notary public fee to be paid in cash on arriving in China.”

So, why do they ask people to travel to China to sign the contract? It’s a lot of work for the Chinese in this scam, but it’s evidently worked out from all of the evidence I found about this Chinese fraud scam.

This site describes the latest Chinese scam, where they ask people to go to China:

- The Chinese company contacted you via the web
- The Chinese company has "Import/Export" in their name
- They want to purchase a very large volume of goods
- They insist that your senior executive travel to China immediately to sign the contract with them in person
- They request money prior to the trip to pay for a reception in your honor, and/or, once in China, they request money or goods to "grease the wheels" with local officials

Here is another example of how this China scam works:

Guilin China Fraud

1. They pretend they are interested in your product
2. They ask for best price / quotation
3. They ask for samples
4. They respond with favorable outlook on your product and price
5. They ask for best price for large order
6. They pretend to be negotiating and informing their boss
7. They extend a buy offer and submit a contract for your review
8. Once you accept the terms they ask for you to come to China to “Sign the Contract”
9. You get excited about the large order and it seems that you have nothing to loose…..
10. They arrange for hotel, pick you up from airport and escort you to hotel
11. You meet the “Boss” and a friendly Women who translates for the Boss (This is to confuse you… The Boss speaks English) he asks a series of questions a. How long in business – (This is used to make you feel he is checking out your credentials) b. What’s your “Net Worth” – (This is used to determine how much they can swindle from you) c. Can we visit your factory – (This is used to make you feel that they are committing to a long term relationship) d. Etc….
12. Your asked to return the next day while they prepare the final contract based on further price negotiations (They do this to fully change your mindset and believe they are committed in purchasing from you)
13. They arrange breakfast, lunch and dinner – (Every place they take you, they get a kickback for your expense)
14. You meet the “Boss” again and he has the final contract for you to sign, he decides to leave the terms at the most favorable price and condition for YOU! (Your excited!!!!)
15. Once you agree with the terms he tells you that his “Finance Manager” must approve but he’s not in the office attending other meetings
16. Your asked to purchase a gift for the “Finance Manager” to insure a favorable outcome and the “Boss” tells you he will work very hard to market your product to the “Finance Manager”
17. You agree to purchase a gift and immediately escorted to an art gallery to purchase a very expensive art – (Keep in mind, you’re not thinking of the price because you just signed a very large contract)
18. Your extremely happy and now continue dinning and shopping – (All controlled by the individuals that are escorting you around… remember they continue to get kickbacks from all locations)
19. Next day you go to meet the “Finance Manager” to complete the contract and your told that the “Finance Manager” had an emergency and is very sorry he cannot meet you.
20. The “Boss” tells you that the “Finance Manager” will come to your factory and you can give him the gift once he travel to your factory.
21. You leave with a contract in your hand, expenses and a high priced gift, never to hear from anyone again. Above is an example of what happened to me, the difference was that I caught onto their SCAM the day prior to me leaving, without going into much more details, I could have avoided this entire SCAM by just doing a little bit of investigation.

You see, these SCAMMERS target new and small to medium companies, companies that are eager to succeed and are looking for that quick break. It’s sad that there are bad individuals out to take advantage of people.

Xi'an Hengyun Import & Export Trade Co., Ltd.

“They have even extended an invitation for me to visit their company in Xi'an, China so that we can personally sign the contract. . . when you come to China and the contract is signed you will be asked to give the CEO a very expensive gift and maybe also pay a vey expensive dinner, they receive Kick back from this,”

“They trapped people to pay for expensive hotel, dinner, buy gift such as paintings worth 100$ at the price 5000$ and something like that. And they get benefit from the hotel, restaurant, and the shop.

And for sure even the contract was signed, there is no follow up and nothing happens after you come back to your country. They will disappear and never answer your phone.”

Guilin Youlianshiye Co.,Ltd

“There are various "importers" in Guilin who do the same: they attract you to their office to sign a "face to face" contract, but they want you to spend money on shopping (on which they make a quite high commission) and, after the contract is signed (a very nice contract, for a big supply of your products) they try to convince you to buy a present for their "boss" so that the business goes smooth.

We were offered to buy a painting worth 100 Euro (learnt once back home) that they wanted us to pay 5000 euro, but we refused.”

It’s bad enough that the communists Chinese are using the Internet to attack America, acts which should constitute an act or War, like attempting to break in to the Pentagon and secret government computers.

Communist China has poisoned our food, attacked our computer systems, make no mistake, China is planning for war against the United States . . .