Showing posts with label china due diligence. Show all posts
Showing posts with label china due diligence. Show all posts
Tuesday, July 26, 2011
International Due Diligence Keeps Companies Safe from China Fraud



Some criminals in China have been giving the country a bad name, and scamming Western businessmen and companies and investors. Since the internet has become a major tool for trading and business relationships for Chinese investment are often built or initiated online, some illegal companies and fraudsters have found ways to cheat investors and importers by taking their money and disappearing. The Chinese economy is still outperforming most countries, and with dismal opportunities elsewhere, investors and businesses are eager to get into the China market, and many are forgetting to do their homework. As a result, scam cases are rising.

Fake companies and false representatives are now the biggest threat facing China investors. Companies and investors in the U.S. by stock on companies that don’t exist, sign business contracts with companies that don’t exist, and so on. Victims pay for items and cargo which is never shipped, and imports are paid for with no delivery. The list goes on. How do companies and business people fall for such scams? The answer is simple. The criminals conducting these scams and fraud are good at what they do, and they use very convincing support documentation and claims. They’re familiar with the industry and use professional looking websites, email addresses and local Chinese phone numbers. The crooks are excellent sales people.

International private investigators have seen a significant rise in the demand for due diligence investigations from companies in the U.S., the U.K. and Australia interested to do business with local Chinese companies. The risk is becoming more widely known, and more CEO’s and investors are taking the risk head on, and minimizing their potential losses with a professional international due diligence service. A due diligence services conducted by a reputable international private investigation company can verify the contact, the business, operations, start date and registration, reputation, legal filing and more. In short, due diligence can save you a lot of money.

Investigators say that most of these so called businesses take advantage of the fact that being online they do not really register themselves as entities and may not even be legally established in their country. Often scammers will claim to be based outside of China to avoid the reputation and perception of risk among Asian nations. In fact, the criminals could be Chinese nationals or even from Malaysia, operating from anywhere in the world using the internet and proxy servers.

Fraudsters are really experts of deception and know how to appear legal. They can get forged legal documents, open temporary bank accounts, get your money and go. Foreign companies interested in investing money in China should check their contacts and the history of the companies they represent. As always, ask for and check the references. Have a professional investigation firm verify their claims and screen the case for fraud, which will also include verifying any documentation and identifications provided. Don’t go it alone, get the help of a professional before closing a deal with a company based in Beijing, Shanghai and even Taiwan.

International due diligence in China can save you a lot of trouble, time and money. Professional investigation firms like Wymoo® International the FBI and Interpol have seen big companies fall for these scams, losing millions of dollars and in some cases even face bankruptcy. Basically, no one is immune from these scams and it’s important to know that the risks are a serious threat to business and investment in China. Wymoo and law enforcement also agree that many crimes go unreported, as companies don’t want their shareholders to know that they’ve fallen for such a scam, and executives are also concerned about personal and company reputations.

Doing business in China is still a good idea if one takes the necessary precautions. When looking for opportunity abroad, do your homework, check references, and get due diligence.

Best of luck,

A Hathaway
© 2011 A Hathaway

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Wednesday, June 29, 2011
International Background Screening: Be Safer Online



The U.S. Consular Affairs Bureau receives a ton of daily calls regarding internet scams.  Not only the U.S. but also Australia and Canada seem to be major targets for online criminals, who usually cover their true intentions behind a false veil of kindness and success. From employment offers to Hollywood type romance, fraudsters always promise some gain in return –after gaining some dollars out of your pocket, or even ruining you financially, of course. And you can be next as there is no age or income group immune to internet criminals and their fraud tactics.  Increasingly, consumers and businesses are turning to international background screening to be safe.

Advance- free fraud, business fraud, investment scams and romance scams target those eager to profit or who have wishful thinking in a business deal or personal romance.   Victims all too often  believe there’s something of great personal or business value to be had, e.g. endless love and happiness, financial independence, business expansion and other promises and potential.

Scams evolve constantly and the list is endless. But some of the most popular frauds to watch out for are romance scams, investments, international financial scams, gold scam and precious metals, China stock market scams, and identity theft.  Though there are several variations like mobile extortion, phishing and even calls claiming a loved one has been abducted, the common factor is always the request for money.  In Latin America, criminals take on more aggressive tactics, and often call their potential victims claiming that a family member has been kidnapped, and if they want to see their loved one again, they had better deposit money in a bank account.  Surprisingly, the person who is supposedly abducted is at work or school, a situation all too common in Brazil, Mexico and Colombia.  Risk from scams is at its highest level in international relationships.  

What to do to avoid these atrocities? International private investigators suggest the following guidelines to prevent being a victim:  1) Never reveal your personal data to someone you’ve never met, 2) Never send money to any person or entity overseas who has not been verified, 3) Get a professional due diligence service to verify any potential business partner, contact or entity that is in a foreign country, and lastly 4) If something does not feel right, or if something seems too good to be true, listen to your instincts, and contact a professional private investigator.

Online scams can be reported to authorities like the FBI sponsored website, the Internet Crime Complaint Center, or embassies around the world, but usually these cases receive little attention, if any.  The volume is simply too high, and law enforcement lacks the resources to track these criminals down, who often hide behind proxy servers and random internet cafes.

The internet is here to stay, and its value is great.   People around the world enjoy the value added by networking, socializing and even doing business online.  For every case of fraud, there are 9 cases of success.  To manage the risk, and to make sure you don’t fall into that 10% category, more businesses and individuals are using international background checks to be safer online.

Best of luck,

A. Hathaway
© 2011 A. Hathaway

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Tuesday, June 21, 2011
China Scams Put Pressure on China Private Investigators



International investment is flooding into China, and the country continues to boom from an economic and population standpoint. Its influence and reach is global, and everything today seems to be made in or sold in China. It is the new powerhouse and place of growth and influx of capital. As global investors and individuals and businesses seek to participate in the growth, private investigators report a significant increase in China scam and fraud activity. In fact, in Beijing and Shanghai, China private investigators have been overwhelmed with background check and due diligence requests to minimize the risk.

A recent investigation conducted by the Beijing Times, the English newspaper of Beijing, indicated that fraud and scam cases are rising most rapidly among stock market and foreign investment opportunities. Too many foreign companies and even individual investors are trying to get access to the Chinese financial market, as investment opportunities in other global sectors and markets remains limited. In this mad dash to chase financial gains, few investors are taking the necessary due diligence. The result? Market bubbles aside, business and investment scam cases, according to one Beijing private investigator, are up nearly 50% compared to 2009 levels and experts say the fraud risk is only expected to get worse.

Because bad news is bad for business (and China), law enforcement and government officials have yet to acknowledge the problem publicly. Efforts by law enforcement in China are lackluster at best. International private investigators say what the public needs to be aware of is that there is an increased need to conduct proper due diligence or a background check prior to entering into a Chinese business deal or investment. Scammers and criminals are taking advantage of the fact that many companies seem to be willing to invest in any idea in China, and many investors are learning the hard way. Reportedly, the estimated loss for financial scams and stock market fraud in China for 2010 was over $1 billion USD. The risk is real, and investors should consider a background check as a form of insurance, a way to minimize the risk and verify.

Whether or not the economic growth in China will continue is uncertain. It is a market of speculation and uncertainty. What is clear, however, is that criminal operations are on the rise in China and new business contacts, investment opportunities and stock purchases should be verified and due diligence is key. Law enforcement and private investigators agree that Chinese investment offers a classic risk-return relationship, and with high potential returns and reward, there is increased risk. To avoid being a victim of fraud or scam, investigators urge consumers and businesses to be prudent and do their homework. For complex cases or when information is not so transparent (common in China), contact a Beijing private investigator or reputable Shanghai or Beijing background check service for confidential verification.

Best of luck,

A Hathaway
© 2011 A. Hathaway

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Saturday, May 14, 2011
Due Diligence to Avoid Chinese Stock Market Scams



China recently surpassed Japan to become the second largest economy in the world, after the United States, and is a global leader in exporting goods and manufacturing. In 2008, the country became stronger by launching an economic stimulus to deal with the global financial crisis, focusing on increasing affordable housing, easing credit restrictions for mortgages, lowering taxes and pumping public investment into infrastructure developments. Last year, China was ready to develop an internal market with rapidly growing wages and has been rapidly increasing its standard of living.

The eyes of the world are focused on this growing market, and there continues to be a major influx of foreign investment. Scams and fraud are also on the rise, and many criminals are taking advantage of the situation, and international due diligence is more important than ever when dealing with China.

The majority of foreign investment comes from the developed nations, such as Australia, Canada, the U.K. and the United States, as citizens in those countries face their own problems at home, and investment opportunities remain limited. China, on the other hand, continues to boom so many investors and companies are pouring money into China without doing their due diligence and verifying potential investments, business partners, unknown business, and contact persons. The result can be a disaster, and in some cases, lead a company or individual into financial ruin. Scammers are busy on the internet trying to find victims to invest in fictitious companies and ideas, and the problem is growing.

Many of the internet based fraud and scams is targeting those looking to enter into the Chinese stock market, or the next big idea which will be emerging from China. Scammers and criminals are now a real threat when entering the investment world of the People’s Republic of China. Experts say it’s wise to consider a mutual fund or hedge fund to enter into the Chinese stock market. For direct investments, there’s only one way to be safe. Do your due diligence with an international background check.

One example of a popular scam is when a small company in Beijing or Shanghai starts some offices, pays for advertisement on buses around the city to gain reputation. Once they become a known entity, they look for foreign investors by accessing capital through a back door, or what’s known as a reverse merger. A private company buys enough shares of a public firm to essentially become publicly traded. That allows the company to pay a much lower fee to be listed than it would with an initial public offering. This type of scam has cost investors some $34billion in the last five years and has taken the NYSE and Nasdaq completely by surprise. Chinese companies enter the stock market in the U.S. but remain located in China, which makes it hard to verify their legitimacy, and harder to get justice. The Asian company will vanish and emerge again as a new small company looking for foreign partners and investors, and the story repeats itself. This is one scam among hundreds that are now common.

Out of the 600 global companies that enter the stock market, 189 come from China. And it’s true, most of the companies are legitimate. China needs investors, and the NYSE needs stronger rules when it comes to foreign companies. In the end, it’s up to the investors to be prudent and skeptical.

International due diligence conducted by a professional investigation firm or international background check company can minimize the risk and uncover potential red flags. This type of investigation can verify company ownership, legal registration, reputation, physical address, representatives and most importantly, reliability. Be safe. Verify with due diligence, and then decide.

Best of luck,

A. Hathaway
© 2011 A. Hathaway.

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Monday, January 17, 2011
Due Diligence in China Strongly Advised

Investigators Say High Fraud and Scam Risk in China













China is booming in just about everything these days. Overpopulation, economy and... scams and fraud. Private investigators with operations in Beijing and Hong Kong warn that scam and fraud is up sharply compared to just two years ago, and new investments or business relationships in China should be analyzed and reviewed carefully. International due diligence is strongly advised for new business relationships in China. Investigators say fraud can come in any form, such as a person claiming to be new supplier or vendor, to claimed consultant agencies and investments. China's growth has attracted a great influx of capital and investments, and businesses and individuals are too often investing without doing their homework.

According to one Hong Kong private investigation firm, investment scams are a rising problem, but investigators are also seeing new types of scam cases which were previously not seen in China and Hong Kong. Romance scams and online dating scams are now operating from China, and although they are still at relatively low levels, private investigators say action is needed from Chinese and Hong Kong government agencies to prevent the problem from growing. International private investigators also report increased demand for China background checks and China due diligence in response to the growing risk for fraud and scam cases. Contacts via the internet are especially at high risk.

The communist government continues to work to control and influence the country's internet usage, but the government's hold on its people is beginning to loosen. With this new freedom comes new opportunities, both for honest citizens and criminals working from China. Investment fraud, romance scams, and advance fee fraud are all on the rise. In some cases, criminal operations from countries as far away as Nigeria and the U.K. are using Chinese banks to smuggle funds. Businesses and individuals should be skeptical and verify any new relationships via an international background check or due diligence investigation.

Best of luck,

A. Hathaway
© 2011 A. Hathaway
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