Case Study
Fraudulent Letter of Credit - Western Europe
An international fraud investigation and complex asset trace enquiry was required after a supplier to a UK pharmaceuticals company fraudulently obtained a £20m Revolving Letter of Credit facility from the company.
The supply agreement appeared to be operating normally for a while but soon went sour when without warning, the supplier, who had drawn down some £13m, failed to deliver goods to that value and promptly disappeared.
Initial investigation found that the supplier was a French businessman who ran a wholesale pharmaceuticals business from a virtual office in Belgium, rather than from the City of London address that appeared on his invoices. However, his current whereabouts were unknown. Further investigation across four continents established that the businessman lived in a hotel in Switzerland, from where he controlled a complex web of companies located in England, France, USA, Switzerland, Panama, British Virgin Islands, Samoa and the Seychelles.
Many of the companies were shell companies, often registered with the same name in two or more jurisdictions. Some of the companies owned valuable residential and commercial real estate assets in France and many of them had linked bank accounts in Switzerland, all of which were under the control of the businessman.
Lawyers acting for the pharmaceutical company were able to obtain a worldwide freezing order against the businessman’s assets in advance of hearings in the High Court in London.
They were subsequently successful in obtaining a judgement in favour of the pharmaceutical company for the full amount together with costs and interest.