MBF Group
In trading products and goods with intermediaries, there are many risks and scams that can significantly affect the safety and fairness of transactions. Often they involve opacity of contract terms, price manipulation, concealment of relevant information about product quality, or the use of unfair practices such as double invoicing or failure to deliver goods after payment has been received.
In addition, the introduction of an intermediary increases the risk of unauthorized access to sensitive data and exposure of parties to potential financial losses. Therefore, it is important for entrepreneurs to be aware of these risks and take appropriate precautions to safeguard their interests. Here are the key risks to watch out for:
Financial fraud
- Fake offers: Scammers often present very favorable offers to sell goods that do not actually exist. Customers may be fooled by the low price and make a down payment, after which contact with the scammer suddenly ceases and the money is lost.
- Orders for non-existent goods: Some brokers may accept orders for products they do not have in their product line. After receiving payment, they fail to deliver the goods, resulting in customers losing both money and the products they ordered.
Problems with the quality of goods
- Hidden defects: Intermediaries may sell goods with hidden defects that are not visible at first glance. Before buying, it is a good idea to check the products carefully or ask for quality certificates.
- Unauthorized products: There is a risk of purchasing goods that are counterfeits or do not meet quality standards. Buyers should pay attention to the manufacturer’s authorization and certifications.
Supply issues:
- Delayed deliveries: Unscrupulous middlemen can miss delivery deadlines, which can lead to financial losses for buyers. It is worth setting clear deadlines in contracts and monitoring the progress of the order.
- Lost shipments: In international trade, there is a risk of lost shipments. Use reliable transportation companies and insure shipments.
To reduce the risk of fraud, it’s a good idea to follow a few key rules:
- Verify partners: before working with an intermediary, it’s a good idea to verify the reliability of the intermediary, using reviews from other clients and available information on the Internet.
- Documenting the transaction: All arrangements between the parties should be detailed in the contract, which can be helpful in case of any disputes.
- Caution when making payments: It is advisable to avoid paying in advance or in full before receiving the ordered goods, especially when working with a new or unknown partner.
An informed approach to risks and exercising caution can significantly increase the safety of transactions when working with intermediaries. Significantly, fraud by middlemen in the trade can have serious legal consequences:
- Criminal liability
According to Art. 286 of the Penal Code, fraud is a crime against property. It consists in leading another person to an unfavorable disposition of one’s own or another person’s property by misleading him or her or exploiting his or her mistake or incapacity to grasp the intended action. Fraud is a substantive crime, which means that it is necessary to have a specific effect in the form of an adverse disposition of property. The perpetrator acts for financial gain. The fraud is punishable by imprisonment for 6 months to 8 years.
- Civil liability
A person injured by fraud can seek compensation through civil means. This may include reimbursement for losses suffered as a result of the adverse disposition of property, lost profits and compensation for the harm suffered. The burden of proof is on the injured party, who must demonstrate the amount of damage suffered.
- Loss of reputation
Detection of fraud can seriously damage a broker’s reputation and confidence in his business. Loss of credibility among customers and business partners can lead to loss of contracts and reduced turnover.
- Administrative sanctions
Depending on the type of business, the intermediary may be subject to supervision by various administrative bodies. A finding of fraud can result in fines, suspension or revocation of a business license. To avoid negative consequences, intermediaries should conduct business in an honest and transparent manner, reliably inform clients about the terms of the transaction, and comply with applicable laws.
Our story of how we were deceived
The above article is based on our recent, very unpleasant, experience with a broker. We have signed a contract to buy and receive 24 tons of urea from the terminal in Małaszewicze. This is a contract we are performing for a company based in Germany. The talks, negotiations and signing of the contract were very quick and went without any major problems. Mr. Dominik Sobczak assured us that on Friday, September 6, 2024, we could place the truck for pickup, make the payment and wait for an advisement for loading.
Everything proceeded in the best possible way with Mr. Dominic Sobczak Multiple phone calls initiated by him, quick exchange of documents, specification of goods – nothing bothered us. This delinquent also took care of the proper groundwork in terms of ensuring his credibility – for which we are sincerely sorry for the industry people who were drawn into the scam.
Finally, the truck was substituted in Małaszewicze on Friday morning and waited to be loaded (rented and paid for at a shipping company). Moments later, according to the agreed schedule, an express currency transfer was made, followed by a few assurances that there would be loading in a moment and… the phone stopped answering and the number from the communicators was deregistered.
Without waiting for Monday and reporting the matter to the police, we took immediate action. Thanks to the capabilities and familiarity of the company’s managers, it was quickly possible to track down the delinquent’s actual city of residence. This is confirmed by the secured IP address from which the contract with us was signed. As we know the city, we will also know where we live.
We were also able to confirm the true owner and beneficiary of the account held by Revolut, to which the transfer for the goods was made (according to the details on the invoice). Notabene is another crime, because false data on the accounting document was indicated. It turns out that the transfer was made not to an account owned by the seller’s company, but a private person: Mrs. Anna Krystyna Kasprowicz. Substituted person or complicit in a crime? We don’t care – everything is secured and will be reported to the prosecutor’s office.
Our scammer was so sure that we would ignore the issue that he attached his… ID card to the contract. Pre-verified and confirmed by his friends as true (!). But I guess he didn’t realize that he had hit on people who can count every penny, as they explain every penny spent to shareholders.
Based on the description of the situation presented, several potential criminal charges can be formulated against the person who committed the fraud:
- Fraud (Article 286 § 1 of the Criminal Code): Mr. Dominik Sobczak could be charged with fraud because he misled you about his intention and ability to deliver the goods – 24 tons of urea. After accepting the advance, contact with the scammer broke off, indicating an intention to obtain a financial benefit at the expense of another person by misleading him.
- Forgery of documents (Article 270 of the Criminal Code): If an invoice provides false information regarding the bank account to which the payment for the goods was to be transferred, this can be considered document forgery. In addition, if the document served as the basis for the transfer, this may also be considered the use of a false document.
- Money laundering (Article 299 of the Criminal Code): If it is established that the transfer was made to the account of an individual (Anna Krystyna Kasprowicz) and not to the account of the seller, money laundering may be suspected, especially if the money originated from a fraud crime and was concealed or transferred in a way that makes it difficult to detect.
- Providing false data for financial gain (Article 286 § 1 of the Criminal Code): The use of false data in documents (such as an invoice) can also give rise to charges of intentional misrepresentation for financial gain.
- Misrepresentation of the identity or role of participants in a transaction: If there is suspicion that a person using an account in the name of Anna Krystyna Kasprowicz is a substitute or accomplice, this could lead to charges of complicity in a crime.
- Using someone else’s ID card to commit a crime (Article 275 of the Criminal Code): If it turns out that the ID card used in the transaction belongs to another person or has been forged, this could lead to an additional charge.
All of these charges may form the basis for criminal prosecution, and the details will be determined during the investigation by the police and prosecutor’s office. As aggrieved parties, that is, as a company of MBF Group SA, we will certainly not leave this matter without a follow-up. Will we share the details of the people by whom we were defrauded and failed to deliver the goods to the German customer? If they don’t very quickly admit their mistake and more than refund the money, of course they will. We are waiting for a possible lawsuit for violation of personal rights.
We recommend all honest participants in domestic and foreign trade to pay attention to our recent experience. Whether you are just starting out or have been in business for a long time, always be cautious, verify suppliers and intermediaries with several sources, secure your interests as much as possible. This will save you unnecessary nerves, time in the courts and chasing thieves around Poland and Europe.
