The Sad Fact of Blackmail and Deceit

By MarEx 2014-02-09 04:39:00

Fraudsters are becoming more and more ingenious in their design and execution of scheme, including the use of modern technology, such as computer hacking, but sometimes tried & tested “old school” methods, such as document fraud, work just as well, says maritime insurer Skuld.

Blackmail Frauds

This crime is not new at all, but modern technology makes it very simple to perpetrate, yet very difficult to track down the guilty parties. The attack and effect is against a victim’s fear of reputational loss, and a desire to not be in the spotlight.

Case Scenario: Blacklisting Fraud 

The association assisted a ship manager faced with a web based blackmail attempt. The fraudsters had set up a website, purporting to be quasi-official, and based on reports that aggrieved seafarers would make about a particular shipowner or manager.

The website would then list the victim company as a blacklisted company, and would advise that being on this blacklist would mean that the company would be investigated by authorities and barred from doing business with governments and high profile corporate entities.

The offered solution was to make a payment for an investigation into the underlying complaint made against the victim company, and should that investigation exonerate the company, then its name would be removed from the blacklist.

All of this was found to be fake and not genuine, but unfortunately for the targeted company, their name would come up when google searched along with the word ‘blacklist’.

The answer was to contact law enforcement in the country which hosted the IP address, make an official complaint and then with the threat of legal action force the IP provider to take down the website.

Lesson Learned: 

Fraudsters will avail themselves of any opportunity that modern technology may provide to assist with their criminal designs. Constant vigilance, and understanding of modern media and IT, plus the willingness to follow through are essential to combat such attempts at fraud.

Another type of fraud, fake job fraud, targets seafarers. Unfortunately this fraud is perpetrated against individual seafarers, often coming from developing nations, who may find it difficult to detect fraud or do anything about it when it happens.

Case Scenario: Fake Job Adverts

This is a regrettably simple fraud, made depressingly easy by the use of modern technology. Fraudsters create fake websites and employment agencies that promise jobs to seafarers, and these may come with alleged connections to major shipping companies and technical managers.

Against the payment of a fee, variously called administration, facilitation or search fees, or other such designations, the fraudsters allege that they will find a job opportunity for the crewman. After the money is paid, and despite many attempts to track down the alleged agent, the crewman is often left with neither the promised job nor a refund of his payment.

It is worth noting that under the recently enforced Maritime Labour Convention 2006, crewmen are not meant to be charged a placement fee by manning agents, but it appears that this practice continues in some places.

Lesson Learned: 

Educating crew as to how the recruitment process is meant to work can assist them in avoiding falling in to this risk. Good manning agents and ship managers are actively involved in helping crewmen know their rights and how the process is supposed to work properly for the benefit of both sides.

Ports can also be implicated in some types of fraud. In some parts of the world, vessels are at risk of fraudsters seeking to use a vessel’s call to port as an opportunity to obtain payment for services and goods that were never provided.

Case Scenario: Fake Agency Invoice 

Type A

In this scam, fraudsters can come armed with invoices for alleged shipping agent related activities and / or supplies to the vessel which were never performed or delivered. They will present themselves as a local shipping agency that undertook work on behalf of the vessel and master.

The fake invoices can, however, come looking very official and even bear the signature and chop of the vessel’s master which would indicate that the fraudsters obtained access to genuine shipping documents related to the vessel’s call and then copied the same on to their fake invoices.

Typically modest sums are involved, for apparently routine types of supplies and services, and they are presented sometime after the vessel has left. Failures to pay may be followed up with threats of blacklisting at the particular port, legal action, arrest of the vessel on her next visit and similar pressure tactics.

Lesson learned: 

Billing departments in shipping companies need to be alive to this sort of fraud and be ready to carefully check any alleged service or provision of stores against the record of the operation department for the vessel’s call at a particular port. A phone call to the actual local shipping agent can also quickly reveal whether an invoice originates from a genuine source or not.

Type B

In this variation, which is another example of advance fee fraud, the fraudsters hold themselves out to be local shipping agents offering supplies and services for a genuine upcoming call at port. They may contact the master direct and make offers that are likely at attractive discounts to what the usual going rate would be at the port. Advance payments are sought, but once made the fraudsters disappear from the scene and no services or supplies will actually be rendered or delivered.

Lesson learned: 

It is important to ensure that business is conducted with known or verified counterparties, and the P&I Club’s local correspondents can often assist in confirming whether a particular local party is a known and established service provider or whether there are concerns.