NATIONAL RE-SHIPPING FRAUD

Summary:

Parrent Smith Investigations was contacted by the insurance company for a computer distributor who had lost several hundred thousand dollars in laptops that were shipped to a location in Los Angeles over a period of months. Our investigation discovered that the computer company had been the victim of a complex re-shipping fraud, using fake email addresses and unwitting accomplices.

The Story:

A computer distributor in Texas was contacted by email by someone who said he was the IT buyer for a large national healthcare company. This "buyer" said his healthcare company needed to order about 60 high-end laptops and needed them right away. The computer company said they could handle the order and the buyer submitted a detailed purchase order listing the specific laptops they wished to purchase and the address where they wanted them shipped. This email correspondence came from an email address that was virtually identical to the email address of the real healthcare company but was slightly different and the computer company employees did not notice the discrepancy. The "buyer" had also supplied a telephone number, which was answered by the "buyer." The name of the "buyer" was the also the same name as an individual listed on LinkedIn, who actually works for this healthcare company in the IT department. So, initially, the computer company did not suspect any wrongdoing. After they had shipped about 20 of the 60 laptops ordered in various shipments over a period of two months, they told the buyer that they needed payment before they could complete the order. They received a check and deposited it in their bank and then immediately shipped 20 more laptops in a number of different shipments. When that check, a fake check, bounced and their bank notified the company, they called the president's office of the healthcare company. The healthcare company didn't know anything about this and denied having ordered the laptops. Distraught about what now looked like a major loss, the computer company contacted their insurance company who advised the company president to report this to the FBI. Knowing it would take the FBI a while to get involved, the insurance company then engaged us to investigate.

We immediately sent an investigator to the address where the laptops had been shipped. It was a small office in a commercial building in the West San Fernando Valley area of Los Angeles. Our investigator reported the name of the proprietor at the office that had received the packages, a small insurance company. She checked out the other offices in the building and reported that it was unlikely that any other company in the building had ordered the laptops.

After some research on the proprietor at the address where the laptops were shipped, we visited his office to confront him with the theft. He was very upset and told us that his assistant had done this. The assistant wasn't in the office that day, but the proprietor immediately got him on the telephone. The story soon came flowing out. This assistant was trying to pick up some extra work and saw a listing on a job site for a "re-shipper". He would be paid $200 a week for receiving packages at his office. The person who hired him would then provide him with a shipping label. He was instructed to place the new label on the packages and re-ship them to other parts of the country. This assistant said he thought that it was kind of weird, especially since he was paid by money order. But he needed the money so he did it, even though his boss was annoyed about all these packages coming to their small insurance office. We asked him to send us copies of the email correspondence with the person who hired him and the labels he received from that person. He did that immediately. He was clearly terrified that he had been, unwittingly, part of a fraudulent theft ring.

 

We submitted our report to the insurance company and called the local office of the FBI to report our findings. It was out of our hands now.

 

 

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