ITIC puts members on alert after uncovering fraudulent diversion of cash

Corruption, Maritime Fraud, P and I Clubs — By on December 17, 2018 at 10:35 AM

International Transport Intermediaries Club (ITIC) has warned its members to perform proper bank account checks when transferring funds to principals and intermediaries.

The warning comes following the fraudulent diversion of a significant sum of cash transmitted in good faith by ship agents to the master of a ship. The ship agents received a request from a shipowner to deliver $45,000 in cash to the ship’s master during an upcoming port call. The funds were remitted and received by the agents who, a few days later, received a call from a supply company and then from the master asking that, rather than delivering the full amount to the master, they should first deduct part of the amount as payment for fresh provisions, to be delivered to the ship during its stay at the port.

The ship agents agreed, as it was not an unusual request, and they subsequently received email confirmation from the master, copying-in the shipowner. A few days later the master confirmed that the actual amount to be delivered on board was $23,000, adding that the remaining funds should be remitted to the supply company as settlement for provisions. This email contained a preliminary delivery note signed by the ship supply company.

Later that week, the ship agents received a message from the master explaining that he expected the provisions to be delivered at 1800hrs the same day, and outlining the denomination of the funds required. This email had the ship supply company in copy and was sent as a reply to previous messages regarding the provisions and cash to master.

However, it transpired that the email had not been sent by the master, but rather had originated from a very similar – but crucially different – email address. This was not spotted by either the agents or the ship supply company.

The agents received an invoice with banking details bearing the ship’s stamp and master’s signature, together with the stamp and signature of the ship supply company. The email attaching the documentation appeared to have the ship supply company in copy, but in fact the email address – again unnoticed by the unsuspecting parties – was slightly different.

The money had in fact been remitted to a party which had intercepted the communication chain and fraudulently obtained the funds. ITIC reminds its members that, when transferring funds, they should use the telephone to check the account details with a trusted representative at the recipient’s office.

*ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com

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