Accurate China Insight: China business scam – Beware of unusually large Purchase Orders

A growing number of small to medium sized companies both in the Republic of Ireland and in Northern Ireland have recently contacted Accurate Group to seek our assistance in verifying the existence of China-based companies (many of which are operating out of the Shenzhen area of Guangdong Province) with generic names such as Brightway, etc., that are sending unanticipated, yet conceivable (and therefore tempting), large purchase orders, with attractive upfront payment terms of up to 50%. Following minimal correspondence, the Irish company contact (usually the Managing Director) is invited to travel to China to sign a contract. However, once in China visiting buyer’s office (which appears to be legitimate, but is merely a respectable cover for a criminal activity), and the initial deposit is due, the seller is asked to pay upfront half the bank fees for the transfer, or a commission in cash. Upon return to Ireland the seller will find no initial payment has being transferred and the party they have been communicating with has disappeared as has any cash they have been paid.

Accurate China Insight - China business scam -Beware of unusually large Purchase Orders

The Irish company usually contacts Accurate after a number of email exchanges with the Chinese company, which points to a level of sophistication on the part of the Chinese entity. They have done their homework and know industry specific terminology across a range of sectors including renewables, electrical filaments, and animal feed.

DON’T BE FOOLED BY SUCH SCAMS

  • If the size of the P.O. from a company in China you’ve never heard of reads too good to be true, that’s because it is!
  • There are easier ways to win in China. If you have never dealt with a Chinese company and just want to be sure they are bo na fide then you should contact a long-term hands-on Ireland China business consultancy with offices and Chinese speaking staff on the ground in China.  As veterans of doing business in China, an Irish China business consultancy, knowing the wily tricks played by Chinese companies, can be of invaluable assistance when verifying the true credentials of a Chinese buyer, supplier or business partner

… and, assuming, the Chinese prospective (product buyer, supplier, partner) company is genuine, an Irish China business consultancy can help you to negotiate and make the sale!

  • Never travel to Company to meet a company without verifying the integrity of the product buyer, supplier, or partner company that has invited you to visit them. In any case such a company will need to supply you with a Letter of Invitation (chopped / stamped with the official Chinese company name – any company doing business in Mainland China should be properly legally established [such as a company, a rep office, a branch, etc.] for tax and invoice issuing purpose), which you need to provide to your local Chinese Embassy when applying for a China entry visa. 
  • Even if you have received a contract in English, assume there is always a contract in Chinese. Ask for a copy and have if verified to ensure that contracts are exact copies of each other.

Incidentally it’s not just small and medium companies who fall prey to sophisticated China scams. No company doing business in China is immune: Look at what happened to Caterpillar who recently had to write off most of a China deal after uncovering “deliberate, multi-year, coordinated accounting” fraud (Source:  http://www.reuters.com/article/2013/01/19/us-caterpillar-siwei-idUSBRE90H1C520130119)?

Do note that these kinds of difficulties are experienced by very few Irish companies doing business in China. Follow your gut instinct, use commonsense and take the same precautions as you would doing business anywhere else.

Accurate China Insight - China business scam -Beware of unusually large Purchase Orders 2

Source: http://accuratelimited.com/blog.view.php?id=t8/dwXC9GMw=

Niall O’Reilly

Managing Director, Accurate GroupIreland China Product & Business Development (Export, Source, Import, Partner Due Diligence) Consultants doing business in China for over 24 years

China Office : 1-3 Ying Hui Xing Zhou, Jiang Nan Shui Xiang Lian Sheng Road, Yu Hang District, Hangzhou. China 310023| O: +86 571 8709 1253

Ireland Office: 93 Upper Georges Street, Dun Laoghaire, Dublin, Ireland| O: +353-1271-1830

China – Under The Hood: The Curious Incident Of The Dissolving Peach

No, I’m not being self-absorbed, and it’s not as if loads of locals around me are succumbing to nasty, mysterious illnesses (anyway the local tabloids always tone down the numbers). Nevertheless, of late in conversations with Hangzhouers I’ve noticed three questions coming up again and again in a tone verging on alarm.

-What are we eating?

-What are we drinking?

-and…. What the hell are we breathing?

-and I’ll toss in another issue…. How can one of the two peaches I bought in the local fruit shop last Sunday turn from unripe into a liquefied mush within 36 hours of purchase? That toxic peach dissolved right before my eyes!

[Anecdote:  A couple of weeks ago having enjoyed a second Kelloggs Nutri-Grain bar (courtesy of a Red-Cross parcel from my mother back home in Ireland, also filled with a critical supply of Barry’s Tea bags) I found myself checking out the nutritional label on the back of the wrapper. Clueless as to what I was reading, it suddenly dawned on me what I was reading wasn’t anything about food.  Why did I just eat a load of preservatives which are of zero benefit to my body? Why indeed..]

If you want to participate in a live laboratory in which the food – [and air-we-breath] – chain(s) are “unintentionally” (yeah right! the expressions of innocence on the faces of those perpetrators regularly showcased to the media are as fake as the vile products they have been caught tainting) exposed to poisonous industrial chemicals with the potential to totally wreck our bodily processes, then all roads lead to China.

I’d never even heard of most of these chemicals by name. Sure I can hardly pronounce them:

  • Watermelons overdosing (exploding melons of mass destruction) on forchlorfenuron growth hormones (May 2011)

  • Sports and fruit drinks laced with “particularly damaging to a young male’s fertility” dioctyl phthalate (imported from Taiwan, June 2011)
  • The “high blood pressure” yielding heavy metal cadmium in rice (February 2011); toxic “kidney failure” conducive melamine in milk (ongoing?)
  • Arsenic in soy sauce (ongoing?)
  • Copper in coffee (imported from Japan, 2008)
  • Bleach in mushrooms (December 2010)
  • The detergent borax in pork (added to make it resemble beef, April 2011)
  • and a whole host of fruit and vegetables smeared in deltamethrin, a synthetic insecticide, and preservatives with extremely long names!

Sure it only seems like yesterday when my buddy Umberto, who being Italian takes his cooking very seriously, watched a pot of fresh tomatoes turn white in a boiling confusion of red artificial colouring (2006).

Here in Hangzhou, affectionately known as “The Pond”, on account of its scenic West Lake,  so far (and counting…)we have:

  • Lead in the air (a lot of it apparently, courtesy of the local battery manufacturing industry)
  • Phenol in the water (courtesy of a tanker driver whose load tipped into the water supply, June 2011)… anyway phenol only causes severe eye damage, and sure what’s 25 tons of the stuff?

Spare a thought for those Harbiners up north whose Songhua River water supply was  contaminated with at least 80 tons of the carcinogen Benzine (ok, so that was back  in 2005 –‘water under the bridge’…so the local officials will tell you, long-term cancer risks notwithstanding).  No doubt, these same faceless apparatchiks will point to Germany’s e-coli cucumbers and bean sprouts (last week), the UK’s Mad Cows (hmmm) and Ireland’s contaminated pig meat (2008) as symptomatic of a global problem not just a China problem   – I’ve noticed they don’t really like talking about the “far worse than governments are revealing to the public” Fukushima nucleur disaster.

The Good News

Yes there is. Multiple the uproar each food scandal outside China receives by 1,000 times and you’ll get a sense of the disgust local Chinese feel about the continuing government incompetence and cynical manipulation of consumers by devious producers. China’s ‘You Are What You Eat’ sensitive generation is becoming increasingly aware of potential hazards of almost everything they eat and drink. What they see all around them are poor public hygiene surveillance and low standards of food quality all of which are cultivated by official incompetence, slapdash law enforcement, corruption and a corner-cutting culture among some businesses. It’s common knowledge that corrupt manufacturers and growers still use bribery and corruption to escape scrutiny.

Which brings me back to the bad news – that peach.

Eat The Peach? Certainly Not!

The facts:

  • Sunday evening in the neighbourhood fruit store

A shop widely considered to trade in Hangzhou’s finest selection of fruits. A large store, open 24×7, all year round, I supposed its popularity was simply down to the fact you are given what you pay for: natural fruit, preservative and pesticide free, as in normal fruit, grown locally… generating visions of suppliers being meticulously selected by a resident ‘Man from Del Monte’, giving his nod of approval to the perfect pineapple or apple… Well not quite, clearly a figment of my imagination.

The shop has a large imported section, offering exotic fruits from all over the world to their bàofā hù (nouveau riche) patrons mad for anything deemed exotic, to know off their knowledge and sophistication.  In my mind best to avoid this part of the shop for the same reason I’d avoid purchasing any ‘fresh’ consumable products from outside China, knowing the length it took to get from source to shelf (Kiwi from New Zealand, Apples from the USA? Bananas from South America? Hmm, imported fruit just looks too perfect and do we really believe they’re all air-freighted in?).

So the local fruit section it is.

  • Discerning shoppers everywhere like pawing their fruit for ripeness and the masses here are no different

However, in a big fruit shop that can make for a lot of grubby paws feeling up the goods: ‘The greener the fruit, the less manhandled its likely to be; let it ripen at home’, so the prevailing wisdom goes.

Two curvy, still hard, peaches caught my attention. I reckoned after being stored at an average room temperature of about 22 Celsius they’d be perfect to eat in three days. Back in the apartment, I left them on the table in their open plastic bag and went about my business, as in business trip to another city.

36 hours later I noticed a damp blot on the table cloth under the plastic bag and lifted it up. Liquid is seeping right through the plastic bag, and while one of the peaches looks exactly like it did when purchased, the other has simply dissolved into a gooey toxic mush.

  • And the upshot of this morbid tale about defiled peaches?

Yesterday, still incredulous, I recounted the story to the wife of Umberto, who, Umberto often complains, is overly preoccupied by a fear of preservatives, toxic chemicals, phony foods, and corrupt practices. Mother of three, Wu Bei wasn’t in the least bit surprised offering me the following prudent advice the next time I go fruit hunting in China:

“.. pick the fruit that’s looks somewhat chewed  and scarred by insects, because if  it’s good enough for them it’s good enough for you…. The most flawless delicious looking fruit is the most dangerous of all”.

A slightly more resigned Umberto quips that perhaps the best rule of thumb is to keep changing your poisons.

Seeing is believing…

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Fast forward to March 2013

– Rivers of blood: the dead pigs rotting in China’s water supply

“Shanghai’s drinking water is under threat after 16,000 diseased pig carcasses are found in tributaries of the Huangpu river…” Source / read more: http://www.theguardian.com/world/2013/mar/29/dead-pigs-china-water-supply?guni=Article:in%20body%20link

The reason why 16,000 pigs ended up in the Huangpu River was never fully explained by the authorities.

Fast forward to April 2013

– Bottled water scandal highlights food safety challenges

“The quality “..criteria Zhejiang’s Nongfu Spring uses are looser than national tap water standards in terms of the amount of arsenic and cadmium allowed in its products…. Nongfu Spring uses criteria that were set by the government of east China’s Zhejiang Province in 2005. National standards were upgraded in 2007…. Nongfu Spring was the only drinking water company to participate in drafting the Zhejiang provincial standards….. enterprises are only allowed to adopt local standards in exceptional cases when there are no relevant national standards….Nongfu Spring’s products do not meet the requirements for such an exception… China has formulated nearly 5,000 compulsory food safety criteria due to its excessive number of government departments….”

” Source / read more: http://news.xinhuanet.com/english/china/2013-04/12/c_132304484.htm

Fast forward to May 2013

– Forget mutton: in China, it’s rat, fox and mink dressed as lamb

Sold in thinly sliced rolls for consumption in hotpots  the “…”lamb” was mixed with rat, fox and mink with additives including gelatin. The meat was sold to farmers’ markets in the two cities…” Source / read more: http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130505000018&cid=1103

Fast forward to October 2013

– China’s Gutter Oil Scandal: 1/10 Of China’s Cooking Oil May Be Recycled From Garbage

“… In our current society everybody tries to swindle everybody else there’s nothing we can do about it.”

http://www.youtube.com/watch?v=Kne4PL5uH7c

….. and this food scandal concerning the cat meat trade…

“.. selling cat meat to butchers who then repackaged it and sold it as rabbit…” Source / read more: http://www.telegraph.co.uk/news/worldnews/asia/china/10417032/Chinese-police-find-slaughterhouse-selling-cat-meat.html

China – Under The Hood: Exposing a quack doctor in Hangzhou

Ever seen the film “Catch Me If You Can“? Stars Leonardo de Caprio, in this apparently true story in which he impersonates a school reporter, a pilot, a doctor, and then a lawyer and fools everyone.  Eventually he gets caught.

Doctor Theodore M, M.D. PhD’, presented himself as “one of the foremost western psychologists residing in China“, with an assortment of qualifications, degrees (which would require substantial academic writing and journal submissions), and experience that covered many different facets of the medical profession. Having satisfied themselves Doctor Theodore M was a highly qualified medical professional local Chinese resident and ex-pats living in Hangzhou with real medical needs flocked to consult with him on various ailments. All had confidence in his abilities not only to treat, but they also took solace in the professional advice that a medical practitioner of his stature would undoubtedly provide.

Early in February, a Chinese girl received an email from the Doctor, which was in effect an unsolicited sexual proposition. The email contained his mobile number. The girl in question demanded an apology. After repeated requests and with no apology forthcoming she posted a warning about Doctor Theodore M on the Hangzhou Expat Forum.  In a state of denial, believing that the best defence is offence the Doctor accused her of defamation of character.

It just so happened that prior to reading the girl’s post on the Forum I was reading a news article in which HR recruitment experts were commenting that employers will always do an online search for “extra” details about potential job candidates — the point being make sure that information about yourself, especially your background, which you post online is true because someone somewhere is going to Google you [or if you are in 2013 China “human flesh search you”!]

Anyway, I had some time to burn today, as one does when it is seriously freezing outside, and as I re-read the posts on the topic raised by the girl something just didn’t seem right. As we say back home, I smelt a rat. This guy’s mode of offence wasn’t very becoming of a medical practitioner of repute, especially a psychologist.

And so began the Google search. Soon Google was throwing up lots of disturbing information about the Doc M… He claimed to have 15 college degrees (including 3 PhDs), he was Reiki Master/Healer, a member of the US Marine’s elite Delta Force, a stuntman, a bounty hunter, a former police officer, and an actor. Google search threw up a huge amount of information about this Superman going back 15 years.

About those degrees:

  • AS Degrees in Arts & Sciences – York & Gaston Technical Colleges
  • BS- Healthcare Services; Alameda University
  • BS-Psychology and Master of Arts- Counselling – Alameda University
  • Masters of Science-Psychology and Masters of Science-General Medicine – Medical University of South Carolina
  • D. in Medicine – Medical University of South Carolina
  • D. in Psychiatry – Medical University of South Carolina
  • D. in Philosophy – UC Berkeley

He had purchased all the degrees certificates online. Alameda University in particular has a reputation for selling any type of degree at a price. Further research confirmed that the Doctor Theodore M wasn’t registered with any reputable medical school / authority in the USA, especially the American Medical Association.

Out of the blue Hangzhou had its very own version of Catch Me If You Can starring Theodore M. The man was nothing more than a con-artist with a very big ego (conmen usually are).

A quack doctor exposed: If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck!
A quack doctor exposed: If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck!

How his scam worked

1.       Buy the degree online

2.       Reside in a developing country with second and third tier cities crying out for the ‘professional wisdom of expert Westerners’, and where nobody can hardly speak  English, let alone read and write it

3.       Have you online purchased degree notarised by the nearest US Consulate (in this case the US Consulate in Shanghai)

4.       Use the officially notarised documents to attain a license to practice as a medical physician

5.       Use your charm

6.       After you have the license you could easily apply for a job in needy hospitals, the notarised documents being proof that  medical qualifications / degree are bona-fide

Doc M‘s approach opened doors to Hangzhou’s leading hospitals, and before long hewas even advertising his services as “a licensed and certified China organizer for organ Transplants for Foreigners“, a minefield controversial subject in China last year given evidence that the body parts of executed prisoners were being used in transplants (a trade that Chinese authorities have since outlawed, which doesn’t necessarily  mean that the organ donation trade will stop in China any time such is the huge domestic demand for organ transplants).  Moreover, most alarmingly, as a licensed physician Doc M was also able to prescribe any type of prescription medication, including anti-depressants and sedatives, which are considered very dangerous medications if not administered by a real professional doctor.

So Doc M was abusing a position of trust that had the potential not only to seriously undermine the credibility of bona fide foreign doctors practising in China, but also the legitimacy of all foreign professionals working in Hangzhou.

Soon other women started coming forward accusing the Theodore M of molestation and worse.  After reading his online dating profiles, and hearing and reading his victims first-hand accounts, it was clear that his deception was deception of the highest order, bearing all the hallmarks of a sex predator, who according to several definitions is a person:

“who is or was seen as obtaining or trying to obtain sexual contact with another person in a metaphorically predatory manner”. (Source: Google it…)

“Doctor” Theodore M was exposed as a quack. The US Consulate in Shanghai and others were informed and he is no longer practicing in Hangzhou, let alone China: Caught!

Resume of a Quack Doctor (as posted online):

“RESUME

FILM EXPERIENCE

Shake Rattle & Roll – Townsperson

Carrie 2 – Paramedic

The Patriot (starring Mel Gibson) – Militia Fighter

MODELING EXPERIENCE

Millie Lewis – Runway Model

TELEVISION COMMERCIAL EXPERIENCE

Two Local Commercials Principal and Voice Over (both)

SPECIAL SKILLS/INTERESTS

Martial Arts, Stunt Fighting, Sword Fighting, Some Singing Ability, Archer, White Water Rafting, Repelling, Expert Marksman, Hiking/Camping, Former Police Officer, Private Detective, Bounty Hunter, Photographer, Paramedic, USMC – Force Recon, Wrestler, Clinical Hypnotherapist/Counselor, Meditation Instructor, Reiki Master/Healer and versed in Buddhism, B.S. in Health Care And Much More.”

At the very least, now we know what the B.S. in Health Care really means.