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The Middle East is a hotspot for the pipes and fittings trading market, but it’s also a playground for crafty scammers. This is a tale of vigilance, trust, and deception.

Our story begins with an order from a seemingly reputable client—a well-known supplier to major contractors. They requested 4,000 meters of 4-inch SCH 40 SMLS CS pipes, claiming it was for an ongoing project. Despite initial doubts, we decided to trust their reputation and provided the order on credit.

Just three days later, they requested another large order, this time for the same quantity. This raised our suspicions. Why such a quick repeat? If they needed stock, why not go directly to manufacturers?

We proposed delivering only 1,000 meters due to limited stock. Surprisingly, they agreed, even at a higher price. But then, they urgently asked for 6-inch or 8-inch pipes if the 4-inch was unavailable. This confirmed our suspicions—it felt like a trap.

We requested a couple of days to arrange the material while secretly starting an investigation. One team explored the scrap market, and, to our shock, found our exact pipes being sold as scrap. We negotiated with the seller to trace the source, suspecting foul play.

Meanwhile, another team visited our client’s office, revealing our concerns. After much discussion, the truth unraveled: we were dealing with scammers. They had lured in a financially struggling individual, set him up as a company owner, and acquired a legitimate business to mask their fraudulent activities.

They operated smoothly for months, conducting genuine business deals, before manipulating bank loans and exploiting their employees’ contacts. Their endgame? Purchasing bulk stock on credit, selling it for scrap, and disappearing before any checks could bounce.

The Scam Unveiled:

Identify Targets: Scammers find individuals in financial trouble, like “Mr. X,” and set them up in the Middle East.

Acquire Companies: They buy established companies, with power of attorney in their names, while Mr. X vanishes.

Create a Façade: They set up flashy offices and hire experienced staff with tempting salaries.

Conduct Business: For six months, they engage in legitimate business, building trust.

Execute the Scam: They start placing bulk orders on credit, selling the stock as scrap at a loss, then disappear.

Lessons and Precautions:

Verify Ownership: Check the technical background of business owners.

Scrutinize Profits: Question unusually high-profit deals.

Request Financial Reports: Obtain company financials before credit dealings.

Investigate Bulk Orders: Be wary of large, repeat orders.

Seek References: Ask for business references from the past two years.

Beware of Urgency: Be cautious if a client pushes for quick deals without due diligence.

Validate Contacts: Check the longevity and authenticity of their contact details and online presence.

This story serves as a cautionary tale for those trading in the Middle East market. Always conduct thorough due diligence and stay vigilant.

Regards,

Muhamed Shahid

Director, Metal Zone General Trading LLC

Pipes, Fittings, Flanges, and Valves Stockist and Trading

+971 559179919

[email protected]