Scammers Up the Ante in Targeting Canadian Commercial Collectors

Editor’s Note: The day after we published an article detailing an attempted scam on a Canadian collection agency (“Canny Collection Agency Spots Fraudsters,” April 21), we received a call from a collection agency in Alberta that experienced the same scam.

It looked like it was going be the easiest $58,000 commercial collection agency W.D. With and Associates (WDW) had ever collected. But when the checks didn’t clear, and the client was hounding them for a wire transfer, the agency knew it had almost fallen victim to a scam. Almost.

Like a previous case of fraud that was documented by insideARM, this one began with a request through WDW’s web site submittal form. But this case involved a new wrinkle: instead of collecting from a fictional shell company set up expressly for the scam, these fraudsters were using a real company to add an air of legitimacy to the swindle.

On March 30, a person identifying himself as a “U.S. based businessman” asked the Calgary, Alberta-based WDW for assistance in tracking down more than C$485,000 owed to them by a company in Montreal. WDW then sent the potential client a collection agreement.

The client said that he was Razak Sahil, a representative of the Global Import-Export Group based in Richmond, Va., and that Montreal-based  Micron Technology, Inc. had failed to pay for delivered goods. When WDW checked into Micron, it discovered that the company was a publicly-traded semiconductor manufacturer with $5.7 billion in revenues in 2007. So WDW contacted Micron at the location provided by Sahil.

When a representative of the collection agency called the number, he spoke with “Anna Johnson,” a very nice accounts payable associate who seemed to earnestly want to clear up the matter. She promised that a bank draft would be sent out directly. WDW received the draft for C$485,750 on April 8, only 10 days after the client had made the initial contact. The draft, drawn from an account at the Laurentian Bank of Canada, cleared initial inspection by WDW’s bank.

“It really was that easy,” Bill With, WDW’s owner and CEO, told insideARM. “Of course, we thought it was a little too easy, and that proved to be correct.”

Less than a day after the check was deposited, both the client – now represented by a man name “John Anderson” – and the debtor, “Anna Johnson” of Micron, began calling to “make sure the money was there.” The next day, the two began pressing With on when the money would be remitted to Global Imports.

On April 15, With received a fax from Anderson instructing him to wire the payment, minus WDW’s collection fees, to an account in a Singapore bank. With then started an internal investigation.

He discovered that the number Johnson had been calling from was not in Montreal at all. The correspondence that WDW had received from Johnson had been on official-looking Micron letterhead, with the firm’s logo and address prominently displayed. But according to its web site, Micron does not have a location in Montreal but is based in Boise, Idaho. And With was having little luck hunting down any official information on a “Global Import-Export Group” based in Richmond.

But both Anna Johnson and John Anderson kept insisting that With wire the money immediately. He calmly told both that the money was being held in escrow for a period of 21 days, per the trust conditions of the escrow.

On April 17, WDW’s bank informed the company that the bank draft from Micron had been returned as counterfeit. With then called the Calgary Police which immediately started an investigation.

The Calgary Police department would not comment on ongoing cases. But With said that he also contacted the Royal Canadian Mounted Police, the law enforcement outfit that handles corporate fraud and scams. The RCMP confirmed to With that a collection agency in Canada had recently been taken for $35,000 in an identical scam.

“I really just want people to know about this,” said With. “For whatever reason, scammers are targeting commercial collectors, and they’re getting really good.”

Several weeks ago, insideARM reported that Richmond Hill, Ontario-based collection agency Financial Debt Recovery Ltd. (FDR), thwarted an attempted scam with a similar modus operandi. The scam appears to be a variant of the “Nigerian”, “419” or “advance fee” scam that hinges on being able to produce a check for a large amount that appears to be valid at first pass, but later turns up with insufficient funds, typically weeks after deposit and too late to recover the money from the scamsters.