"Investigation Beforehand" seen through a failed fraud case

This article illustrates that the credit investigation plays an important role in prevention beforehand through a small case. The author of this essay is an experienced investigator with unique insights and the case told by him is vivid, typical and thoughts inspiring.

With the business activities in economic field being more and more frequent, and the volume of business trade and investment being increasing, various kinds of mishandling are appearing. Some illegal businessmen are gaining profit without considering about methods. Therefore, all kinds of commercial frauds are becoming common occurrences. The case of failed fraud in Haishi is just one example.

A. Case

One commercial trade company In Haishi (company A) was developing rapidly in these years, annual income increases form the beginning several million Yuan to present several hundreds of million Yuan. Since the present office was no adaptive to business development any longer, they were looking for a new office location urgently. This news was spread widely without striking a blowing. One intermediary company came and introduced a location (run by company B) as A expected. Within a week, A and B signed a contact of real estate purchase under the link of the intermediary company. A would buy the office owned by B at that time for 30 million Yuan. Just before the decisive moment of payment, the superior administration of A came to Haishi to check its work and suggested A not to pay temporarily. To get assured, an investigation about the real situation of the new location to be bought and its owner was required.

B. Field investigation

Steele,()one of the professional institution of commercial fraud prevention,(-)was then chosen and accepted the commission of A company. It succeeded in finding out a failed fraud co-committed by the intermediary company and the seller.

It turned out that the legal person of B was an foreign individual businessman at the beginning of the establishment of company, which was founded with cooperation with the local village committee. The latter provided the land and the factory buildings as the operation location of B. This individual businessman contracted the company, assigning himself as legal person and president. High-class apparels and hand-made art objects are traded in this valuable field. Several years later, one million Yuan loss was produced because of bad management, and the company was close for bankruptcy with burden of debts. When he was informed from his fellow town-man in real estate middle company that A was looking for office location, they co-plotted this fraud of stealing chickens to lay eggs and cheating money out of A.

1. The fellow town-man approached A and introduced the office of B (in fact owned by village committee). He would get a commission of 5% of the selling price of the building if done.

2. It was in charge of B to "prepare" related documents, to negotiate with A with an offered price of 35 million Yuan and a base price of 30 million Yuan.

3. In order to meet the anxiety of A, B promised to go through formalities of real estate ownership transfer within one month after A signed the contract and paid.

It was confirmed by local administration of real estate that the real estate B attempted to sell was in reality owned by village committee of Xiaojiang District. As one of the shareholders, the village committee knew nothing about that before Steele went to undertake investigation. The Director of village responded angrily that it was quite absurd that B tried to sell their real estate without their knowledge, more than not paying contract fee.

An inquiry of local court revealed that two creditors had charged B in succession because of long-term debt. This bad plan was made just to find one way out of its difficulties and so law was violated and crime was committed.

C. Analysis and suggestions

Here it is not our goal to describe the premeditated fraud of B or the anxiety for a quick result of A. Rather, it aims to show the valuable consciousness of "investigation beforehand" of the superior administration of A. If the superior company hadn't come to check its work, or hadn't had such consciousness, A must have fallen into the trap co-plotted by B and intermediary company, and have not only lost 30 million Yuan, but also faced an impasse probably.

Just like battleground, the business field is volatile; there can never be too many deceptions. There exist commercial frauds any place at any moment. In order to prevent frauds, firstly legal concepts must be strengthened and consciousness of investigation beforehand must be increased so as to know enemy and know yourself, you can fight a hundred battles without defeat. Secondly, it is necessary to get information about service institutions of fraud-prevention and then be able to contact them easily. Steele, with relatively high awareness and reputation in Beijing, provide investigation services as follows:

1. Safeguarding business security and Anti fraud investigation

2. Fraud related to insurance claims investigation

3. Collecting evidence before and after lawsuit

4. Investigating commercial credit

5. Investigating pre-employment

6. Investigating the background