Scammed copper trader with red painted cobblestones

Deception on the merchandise. When teams from Swiss trader Mercuria opened the containers supposed to house their copper cargo, they found no trace of metal, but concrete blocks roughly painted red. No doubt, Mercuria was the victim of fraud to the tune of $ 36 million.

The story takes place in the summer of 2020. Last June, the Swiss commodities trader agreed to buy 6,000 tonnes of copper from Bietsan, a Turkish supplier with whom he had previously done business, told Bloomberg Sinan Borovali, lawyer for the trading house in Turkey.

The goods are loaded into a first batch of containers – there will be 300 in total – before an inspection by a specialized company. Seals are placed on the doors of metal boxes to guard against fraud, continues the lawyer.

Cargo replaced

It seems that the containers were reopened after dark, the copper was replaced by blocks of stones painted red. The seals were also returned. The first part of the cargo leaves the Marport terminal in the port of Ambarli near Istanbul.

Night after night, the same fate is reserved for other cargoes. Once the cargo ships are at sea bound for China, Mercuria pays the $ 36 million at the end of August. The deception was not discovered until the first freighter landed at the port of Lianyungang in China a month later. In the meantime all the ships have left the shores of Turkey.

13 suspects in custody

Mercuria has decided to take its supplier to court in Turkey, but also to appear before an arbitration tribunal in the United Kingdom. “ Those suspected of organized crime against Mercuria have been taken into custody », Explained the trader in a written statement in which he thanked the Istanbul financial crime fighting services. Thirteen people would be affected.

In this kind of situation, the trader can turn to cargo insurance. But Mercuria discovered that only one of the seven contracts was real, the rest being fake.

This case illustrates how fraud plagues the commodities sector and weakens traders. Singapore-based oil trader Hin Leong went bankrupt last spring after hiding losses and selling off stocks of crude that served as collateral. Faced with this type of business, banks are increasingly reluctant to finance traders.

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