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European polymer distributors hit in purchasing scam

By: Hamish Champ
PRW

February 18, 2014

A number of United Kingdom and Italian plastics businesses have been hit by a scam operated from the United Kingdom that has cost the firms an estimated 1 million euros ($1.37 million), according to PRW.

Several of the companies known to have been affected are prominent members of the British Plastics Federation's (BPF) Polymer Distributors and Compounders trade group.

The firms were approached late last year by individuals claiming to represent a company called Kreate UK Ltd.

Representatives of the fake business said they wanted to buy materials such as polypropylene and polyethylene and offered what appeared to be bona fide credentials.

The existence of a Belgium-based company of the same name — which turned out to have no connection with the 'company' that made the approaches — lent credibility to its story, said a senior executive of one of the businesses caught up in the scam.

The fraudsters claimed the Belgian firm was their parent company and provided a UK-registered number which the legitimate business used.

"They were well-spoken, they offered a good story, said they were looking to start manufacturing in the UK, and appeared to be legitimate," said the executive, who asked for anonymity.

"The fact the fraudsters gave the registered number of the genuine Kreate Europe business being cloned effectively meant credit checks came back strong," he added.

Placed orders were collected by the fake company but the fraud came to light when suppliers began to chase "Kreate" for outstanding payment, only to find that the telephone numbers it provided were now dead.

Combined, more than half a dozen companies supplied the bogus firm with between 700 and 800 metric tons of material.

Duped firms approached the Belgium-based Kreate, which was being chased for payment by several other scammed companies. The scam was then quickly reported to the authorities and fraud bodies.

Suppliers also discovered that personnel working at the Midlands-based premises where the fraudsters claimed to have been operating had never heard of the company.

After one company caught up in the scam was offered material fitting the description of some of the stolen product police raided unmanned premises in Walsall and uncovered 30 metric tons of material identified as having come from two of the firms hit by the fraud.

But despite removing computer equipment the trail to find the scam's perpetrators had since gone cold, said the director.

"We contacted Action Fraud UK [a service run by the National Fraud Authority — the government agency that helps co-ordinate the fight against fraud in the UK] but things appear to have reached a dead end.

"All we can do is urge people that if they are approached with offers of material [polyethylene and polypropylene] which they suspect might be dodgy that they check it out thoroughly and if in doubt contact the Northamptonshire police, asking for PC Chris Pettitt, or PRW, with the details," he added.

Another UK distributor hit by the scam also believed the fraudsters knew exactly what they were after.

"These people ordered specific grades. They knew what they were doing and appeared to have identified a market for the material they wanted," said a source at the firm who wished to remain anonymous.

Companies who spoke to PRW about the case said they would be revising their sales procedures in future in order to try and spot potential fraudsters.

The scam operated by "Kreate" bears some similarity to that which hit Louth-based compounder Luxus last year and which PRW reported at the time.