P.S.I. Investigations llc
Professional Service Integrity
P.S.I Investigations Blog
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Neil uncovered fraud and hidden assets during my recent divorce proceedings, finding over $450,000.00 in hidden assets and accounts. Neil is an honest accomplished investigator with an excellent reputation.
B.B.
Whatcom County
A Heavy Heist....
We were retained by a local Factoring company to identify and recover $7.2 million in missing funds and inventory for a national Distributor of exercise weights and equipment. A factoring company will extend up to 80% of the sales invoices value for a company, in exchange for the collection of 100% of the invoice amount....... realizing a relatively quick and easy 20% profit.
The Factoring company first realized something was amiss when they attended the Distributors Vancouver warehouse (to follow up on some unreturned phone calls) and found a Bailiffs seizure notice attached to the door for non payment of rent. After getting over their initial shock and the realization that they had extended 80% on almost $7.2 million in sales orders, they contacted us to locate the Distributor and recover as much of the inventory as we could.
Our initial investigation started off at the Vancouver warehouse, where we met with Bailiff and Sheriff officers, and were able to convince them to allow us access inside the Vancouver warehouse, to search and collect all paperwork and documentation left behind, and to facilitate our attempts to locate the Distributor.
As a result of our search we were able to identify and locate a previously unknown warehouse and residence in Seattle WA, where the Distributor was believed to reside part time, and another previously unknown warehouse in Los Angeles, and were able to determine the 'common scheme and method' used to defraud the Factoring company.
The Distributor had produced fraudulent invoices from legitimate existing buyers, explaining the greatly increased sales volumes as 'inventory for upcoming special promotions', then presented them to the Factoring company for advance payment.
The Distributor then used some of the advanced funds to purchase Letters Of Credit for Chinese manufacturers to manufacture and ship the merchandise by container from China to Vancouver under a standard Ocean Bill of Lading.
The distributor then created fraudulent LOC's for additional shipments to the unknown warehouse in Seattle. All of the paperwork and shipping arrangements were processed through a co-conspirator at the Los Angeles warehouse facility, so that later changes in routings and paperwork would not be questioned by the shipper in China.
We hired local P.I.'s to accompany us in Seattle (and in L.A.), to satisfy local state requirements for out of state investigators, then travelled to Seattle to check out the warehouse finding that it was unoccupied and empty. We then found the Distributor still staying at the Seattle rental residence and interviewed him. During our interview he denied everything we had documented, denied that he was hiding in Seattle from the Bailiff and the Factoring company, and refused to cooperate with our investigation.
We then flew to los Angeles, met with the local investigator, and attended the third warehouse. It was soon determined that this warehouse was a general freight terminal handling shipments for many transport companies and shipping lines. Upon interviewing the general manger and discussing some of the evidence we had uncovered, we found that the Distributor had used a combination of fraudulent Ocean Bills of Lading (OBL) and fraudulent Letters Of Credit (LOC), to purchase and ship 22 containers of weights and machinery from China to Seattle during the previous two months, but they were no longer at this facility.
We also determined that of these twenty two containers only the first two containers arrived at the intended destination at the Port of Vancouver.
Seven containers were diverted to the port of Long Beach, Los Angeles where they were delivered to the L.A. warehouse, unloaded and reshipped to multiple Buyers in Texas, Florida, and Oregon. The empty containers were returned to the Port of Long Beach for eventual return to the shipping company.
The remaining eleven containers had been diverted to the port of Seattle mid voyage, where they were delivered to the Seattle warehouse and subsequently went missing. As the shipping company owned the containers, and under maritime law were responsible/liable for the missing contents, they were able to assist us in tracking the missing container numbers throughout their system. We soon discovered that nine of the eleven missing containers were empty and had been returned, or were currently awaiting return, at terminals in Alberta, Ontario, and Nova Scotia, Canada.
During our prior search of the documents recovered at the Vancouver warehouse we had also discovered some personal information and correspondence between the Distributor and a potential Buyer in Alberta Canada............. so that's where we headed next.
We arrived at Calgary International airport early the following morning, rented a vehicle and dropped in on the potential Buyers residence, no doubt ruining his breakfast. After a lengthy discussion of what we had discovered was going on, and his many denials of culpability in the scheme, we were able to determine that the Distributor had approached the Buyer (any likely several others) offering to sell them the container loads of weights and machines for pennies on the dollar .... in cash only of course.
Subsequently, based on the recovered documents and the statements of witnesses in Alberta, Seattle, and Los Angeles, we were able to locate the final two containers, still full of merchandise, and return them to the Factoring company in Vancouver to be sold and offset his losses.
OUTCOME:
After a thorough 6 week investigation, we had gathered enough evidence to obtain and execute civil search warrants (Anton Pillar Orders) on the Distributors family home and vehicles.
The documentation, evidence, and records we recovered in his home and wall safe revealed a complete list of sales and the Buyers who received the container loads of stolen equipment.
This evidence and records also revealed a lavish lifestyle with family cruises, expensive vehicles, out of country skiing trips, out of country vacations, and a penchant for expensive jewelry and liquor.
The Factoring company took the Buyers and the Distributor to court and were able to drastically reduce their losses, but still lost a couple of hundred thousand dollars in profit, after it all was done.
This was one of our more entertaining cases....... stay tuned for more!
