Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 2024

Trader buys $36 million of copper and gets painted rocks instead

Trader buys $36 million of copper and gets painted rocks instead

Commodities trader Mercuria says it is the victim of fraud. Thieves in Turkey switched painted paving stones for copper
Commodities trader Mercuria Energy Group Ltd. struck a deal last summer to buy $36 million of copper from a Turkish supplier. But when the cargoes started arriving in China, all it found were containers full of painted rocks.

The saga unfolds like a gangland thriller, with the Swiss trading house saying it’s been the victim of cargo fraud. Before its journey from a port near Istanbul to China even began, about 6,000 tons of blister copper in more than 300 containers were switched with jagged paving stones, spray-painted to resemble the semi-refined metal.

The bizarre case highlights commodity traders’ vulnerability to fraud, even when security and inspection controls are in place. In 2014 and 2015, Mercuria took provisions to cover potential losses after metal contained in a warehouse in the Chinese port of Qingdao was seized by authorities as part of fraud investigation.

Turkish police took 13 people into custody in relation to the faux-copper scheme. Mercuria, one of the five-biggest independent oil traders in the world, is seeking redress in both Turkish courts and a U.K. arbitration case against the copper supplier, Bietsan. It’s also filed a formal criminal complaint with Turkish police and prosecutors alleging cargo substitution and insurance fraud, leaving the authorities to determine who’s responsible.

Several calls to Bietsan’s offices in Tekirdag went unanswered.

“Suspects have been taken under custody who are thought to be involved in the various parts of this organized crime against Mercuria,” the Geneva-based Mercuria said in a written statement in which it thanked the Istanbul Financial Crimes Department.

The story was pieced together from legal documents, interviews and local media reports.
Copper Switched

Last June, Mercuria agreed to buy copper from Bietsan, a Turkish supplier it had done business with before, according to Sinan Borovali, the trading house’s lawyer in Turkey. It appears that copper was initially loaded into the first shipment of containers, before being surveyed by an inspection company. Seals used to prevent fraud were then affixed to the containers.

But under the cover of darkness, it is alleged the containers were opened and the copper replaced with paving stones, Borovali of Istanbul law firm KYB said in an interview. The fraudsters switched between fake and real container seals in an effort to avoid detection.

As ships left Marport terminal in the port of Ambarli every few days, the same thing happened: the copper was secretly unloaded at night and replaced with painted rocks. “This was how they did it,” Borovali said.

With the vessels at sea, Mercuria paid $36 million in five installments with the last payment made on Aug. 20, 2020, according to documents provided by the commodity trader to Turkish investigators. The fraud wasn’t discovered until the ships began arriving in the Chinese port of Lianyungang later that month. By then, all eight vessels were en route to China.
Organized Crime

“There has been a criminal investigation petition by the buyer against the seller and two intermediaries,” Turkish police said in a statement. “It’s been determined that the incident is the outcome of fraud perpetrated in an organized manner.”

Normally, in such cases of non-delivery a trading house could make a claim against a cargo’s insurance policy. But Mercuria found that just one out of seven contracts used by the Turkish company to insure the cargo was real. The rest had been forged.

The 13 suspected fraudsters were taken into custody this month in a series of police raids. Some have since been allowed to leave custody and placed under house arrest, according to local newswire reports. More hearings on the case are expected from this week.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×