Agencies Fighting Back Against Advance-Fee Fraudsters

The fraudsters behind the “advance-fee” scam appear to have been aggressively approaching a number of commercial collection firms in recent months in both Canada and the U.S., insideARM has learned.

“They contacted me on March 6 and I received a check Monday for $177,000. It’s a pretty elaborate scam,” said John Monderine, owner of Rapid Recovery Solution, Inc. in Farmingville, N.Y. “They’re going to get someone eventually.”

Monderine has filed fraud reports with his local police and is in contact with the Internet Crime Complaint Center, known as IC3, a partnership of the FBI, the National White Collar Crime Center, and the Bureau of Justice Assistance.

Several firms contacted insideARM after its story yesterday on a firm in New York City that had caught on to the crooks before being taken (“U.S. Collection Agency Foils Advance Fee Scam,” May 6).

In that story, National One Credit Corp. founder David Matten recounted his experience with a firm that sought to pay National One a 20 percent fee to collect $300,000 from a firm in Russia. He became suspicious of the operation because it seemed too easy to collect on the debt and receive such a large, quick payment from the client.

In the scam, the crooks are both the client and the debtor, and use relatively sophisticated telecommunications gear, false fronts and documentation to make both parties appear legitimate. The client hires the agency, the agency contacts the debtor, and the debtor sends a check to the agency. The agency deposits the check that appears to be good, takes its fee, and sends the rest to the client, with the backing of its own funds. The client cashes that check, but in a few weeks the agency’s bank determines the debtor’s check is a fraud, and the agency is out the money it sent the client.

Monderine said that the fraudsters apparently used the same paper work to target his firm as that used with National One. The client listed itself as China Aviation Ltd., and a representative of the Russian debtor was dubbed Fruition Trust Management & Loans and based in Edmonton, Alberta.

Monderine sent a copy of the $177,000 check to two banks listed on the check and both confirmed it was a counterfeit. Monderine said he is waiting for the crooks to send him remit instructions on where he should send funds. That promises to include a wire address that can be traced, he said.

An executive at a Canadian collection agency told insideARM he became suspicious because the purported client couldn’t provide thorough documentation on the contract that led to a supposed $400,000 debt. “I was persistent for more information and they never followed through,” said the executive who preferred to remain anonymous.

He said the client called himself John Richard and had an accent that didn’t seem to be either Canadian or American. National One’s Matten described the crook in similar terms, though the con man also used the names Mark Richard, Mark Roche and Mark Smith. A man answering the phone at Fruition on Monday told insideARM his name was Peter Richard.

Several law enforcement agencies did not return calls by insideARM’s deadline.

Monderine is trying to get the word out to industry colleagues and to press law enforcement to make this a priority. “They get hundreds of complaints and some things can slip under the radar. Hopefully we can nip this in the bud.”