A U.S. distributor was bilked out of motor oils valued at nearly $100,000, shipped to a Canadian warehouse, when the Montreal buyer declined to pay and then virtually disappeared. Canadian police are on the case, and warn that similar cross-border commodity scams are on the rise in Montreal.
The U.S. distributor received a phone solicitation in late July from a woman claiming to be Sylvain Prima, president of Power Brand Solutions, a lubricants distributor in Montreal. The U.S. distributor doesnt believe it was specifically targeted, and suggests it was more likely that Power Brand Solutions contacted a large number of U.S. distributors in hopes a few would respond. She listed off five or six brands, and wanted to know if we were distributors for them, the source recalled. What she hit on was Castrol.
The Power Brand Solutions official requested that the U.S. distributor ship the motor oil to a warehouse location in Montreal. The U.S. distributor was then called by Power Brands sales manager, who sounded knowledgeable about motor oils and packaging.
He gave us some things hed like us to quote, and we did, the source recalled.
When I talked to the sales manager, he knew exactly what he wanted, including which viscosity grades he wanted. He knew exactly how pallets were configured, how many cases per pallet, and how much they weighed.
The Montreal company then filled out a credit application supplied by the U.S. distributor in late July, and included additional information such as references, a certificate of incorporation from the Canadian Office of Consumer and Corporate Affairs, a bank authorization letter from TD Bank Canada Trust and a voided check.
We checked the references, did our due diligence, checked in with the bank, the source said. Everything looked legit.
The U.S. distributor received the order for motor oils in early August and arranged for shipment to Power Brand Solutions warehouse in Montreal later that month.
From what we can find out, it cleared customs, and it was warehoused for an unknown amount of time at the ship-to address on our invoice, the source continued. They had agreed to wire us funds on 30-day terms, so in 30 days, we called them. For several days the distributor contacted Power Brand Solutions, attempting to resolve the payment issue, but getting a runaround. Eventually the Montreal distributor stopped responding to calls.
Calls to Power Brand Solutions by Lube Report were answered by an automated outgoing message, with no option to leave a voicemail. At its web site, Power Brand Solutions claims to have existed more than 10 years and to offer a variety of brands, including Castrol, Pennzoil and Valvoline. It touts a variety of lubricants beyond motor oils, including transmission, hydraulic, gear and metalworking fluids.
The U.S. distributor tried contacting its freight company, which was also trying to reach Power Brand Solutions. After 10 days went by, they started digging try to find out where the product was. They located somebody that actually bought the product at a garage, the source noted. But the freight company suddenly declined to pursue it any further, according to the U.S. distributor. They just clammed up, and said, We dont know if its worth it. Youll have to go to the police.
The U.S. distributor contacted a private investigator in Montreal to look into the matter.
He started to tell us this is pretty shifty, that the office location they had was vacant and warehouse was empty, the distributor told Lube Report. He was doing legwork for us, and then I did go ahead and file an FBI report.
The next step was to go to the Canadian authorities. They were very interested, the source said. So thats the point where were at now, with the Royal Mounted Canadian Police. Theyre getting up to speed on the case. The distributor followed up with its local police department as well.
Other U.S. lubricants distributors that come across this type of offer or solicitation should be leery of sending any large amounts of oil to an unknown company in Canada, Corporal Tim Caron, Royal Canadian Mounted Police, told Lube Report. Caron is complaint management coordinator for the RCMPs Commercial Crime Section in Montreal.
Caron said that while the motor oil case seemed new, the Montreal area has had a similar problem with scams on other purchased goods such as fruits and vegetables.
They were sending up truckloads of fruits or vegetables coming out of any of the processing areas – were talking Florida, were talking California – theyre shipped here to Canada, and they get the shipment, Caron explained. What we call it is back door shipping. They ship it to a location, and once its unloaded, they load it up again into a different truck and its shipped out. This is becoming a large scam. Now we see that theyre going over to motor oil.
He noted that similar scams could happen with any commodity, especially when prices are high. The people have to be aware of it, the officer emphasized. Do your due diligence. A lot of these companies have. Ive heard of one where the person has checked out everything, but it turns out that with the credentials, it was all falsified.
Because paperwork can be falsified, he said, its important not to take the documents at face value. Even if a banking document looks legitimate, for example, its important to contact the bank directly to confirm the company has an actual account with them. He also recommended contacting different authorities in Canada to confirm the buyer has a legitimate business there.
Caron said the U.S. distributors case will likely fall under the purview of the Quebec provincial police, which would be the equivalent of a state police department in the United States. Since were here in Quebec under federal mandate only, the RCMP will only look into fraud that is against federal government, he said. Well still help individuals to make sure their complaint is heard and that theres followup. I also have contacts with other police services in the area, and we exchange a lot of information between us.
The officer advised that if other U.S. distributors believe they are victims in this possible scam case, they should first file a report with the local police in their jurisdiction.
Id prefer they go through their local police, Caron said. In some circumstances theres a question of insurance, so by reporting it to their local police service thats one of the criteria insurance companies would like to see. Well acknowledge receipt of the local police report.
Caron acknowledged that local police officials in the U.S. will probably note that they have no jurisdiction in Canada. But they can pass the information on to us, he continued. If the local police are willing to take their report down, Im willing to take the extra effort to pass it on to the jurisdiction its going to fall under here in Canada. They can contact me directly, and I have no problem with that.
The officer noted that victims can also file a report via Canadas Reporting Economic Crimes Online web site at http://www.recol.ca/. They can take a printout of a report filed at that site, and bring it in into their local police to use as a draft in filing out a crime report. We take those reports, look at them daily basis, and evaluate them on a daily basis, he added. Well be working with complaints coming in, and well put information together to pass on to the proper authorities [in Canada].
Carons fax number, for local police officials to use in forwarding a commercial crime report, is 514-939-8628. The faxed police report should be addressed to Corporal Tim Caron, Complaint Management Coordinator, Commercial Crime Section, Royal Canadian Mounted Police. For more information, contact Corporal Caron at 514-939-8304.