FEATURE: 12 Years of an Alleged Scam Targeting the Bunker Industry

Evidence points to one alleged scammer being active in the bunker industry for at least 12 years. File Image / Pixabay

An investigation by Ship & Bunker has found evidence that a single individual has been targeting the bunker industry with alleged scams that have been ongoing for at least the past 12 years. 

Following Ship & Bunker's report last month of an alleged scam by a UK-based individual targeting the bunker industry, several readers wrote in to say they have been targeted in similar scams.

Moreover, at least seven different sources independently named the same individual as being behind such alleged scams as recently as last month and dating back to at least 2011.

As Ship & Bunker previously reported, most recently that individual has alleged to represent the Japanese Navy.

While the cases detailed to Ship & Bunker vary in their specifics, a theme can be seen in all of them; lucrative business is offered in a less familiar part of the world with an entity -- usually defence-related -- which would typically be less price-sensitive in its bunker procurement, but with bureaucratic hurdles to pass before business can be conducted.

The individual asks for a refundable deposit of several thousand dollars in return for facilitating the business. Time then passes, with no business forthcoming, and the deposit is not returned.

Many who Ship & Bunker spoke to believe the amounts are small enough for companies to simply accept the loss without engaging in legal proceedings.

At this stage, for legal reasons Ship & Bunker is not naming the individual.

A Global Scam

In support of the allegations, Ship & Bunker has seen emails, documents, and WhatsApp conversations all appearing to be from the same individual who has targeted bunker industry players all over the world.

Among them is Adrian Little at Connecticut-based Bunker Trader, Merlin Petroleum, who said they lost more than $10,000 to the individual in about 2015.

"We didn't get anything in the way of business, not a single solitary inquiry [after paying the deposit to the individual]," Little told Ship & Bunker.

"We expected some results over a period of time, and time went on and we forgot about it and moved on to the next thing.

"In the trading business, most of the times you win, sometimes you lose."

Separately, a broker based in Europe showed Ship & Bunker WhatsApp conversations detailing how they were targeted in 2022.

In them, the individual asks for a "fee / deposit" of $3,000, promising that it can be refunded on conclusion of the first delivery.

"Very Japanese but gives them a commitment locally," the individual behind the alleged scam explains, adding that their discussion must be kept confidential.  

In South Asia, Pakistan-based physical supplier, Orion Bunkers, says they were targeted by the individual this year.

"They contacted me several times with the same story as mentioned in the Ship & Bunker article," Zishan Arshad, Director Bunkers, told Ship & Bunker.

"The first time they contacted me was 3-4 months ago, then they would contact me from time-to-time after that. The last time they did was last month.

"I never trusted them, so we have not done any business with them."

Marc Gawthrop of Canada-based Arbutus Point Marine said he had lost "a small sum" earlier this year in one of the individual's alleged scams.

As with others who have been targeted recently, Gawthrop said the scam involved the individual purporting to represent the Japanese Navy.

Red Flags

While establishing the credentials of your counterparty is a cornerstone of transacting in the bunker industry, it is not always easy to spot a fraud.

In the case brought to light by Ship & Bunker involving purported representation of the Japanese Navy, some readers felt that asking for a refundable deposit should have been an immediate red flag.

One long serving credit manager in the marine fuels industry told Ship & Bunker that at the very least, companies need to be much less trusting when asked for deposits before conducting business.

"Credit managers are a cynical bunch, and we get enough legitimate enquiries coming across our desks to be able to see glaring departures from the norm," they said.

"You just wouldn't ever pay deposits, I can't recall ever actually doing that or being asked legitimately to do that in 20+ years in bunkering.

"I'm not sure how this case got as far as it apparently did."

But another source suggested that paying deposits might be needed in some cases where large amounts of work is needed to set a company up with a more bureaucratic organisation in the defence space that has strict standards for its suppliers.

"Some business involves a lot of pre-business man hours, like the US Navy for example," the source said.

"So if someone -- who you think is legit -- offers to do it for you and bring the business, it may be worth paying someone up front."

A Wider Problem?

Some who have spoken to Ship & Bunker highlighted that such scams are not just limited to this individual and not only does similar fraudulent activity take place, it is likely more widespread than many realize.

"It's one of the better-known scams going around, a bit like the '50,000 JP54 in tank in Rotterdam, do you know any buyers?' scams," one source said.

Being targeted by such scams is not typically something that companies voluntarily highlight, and understandably so. Indeed, a number of companies understood to have been recently targeted by such bunker scams declined to comment when contacted by Ship & Bunker.

This lack of willingness to discuss such cases of fraud may be one reason why they are so rarely reported in the media. It may also restrict what action the authorities can take against the individuals behind the scams.

To that end, Ship & Bunker understands that the National Fraud Intelligence Bureau (NFIB) in the UK has been contacted to investigate the individual in the alleged Japanese Navy scam.

While Ship & Bunker has been able to confirm the case number for the investigation is NFRC230906177306, it is understood that currently the case does not "rise to the level of opening an investigation".

NFIB has so far not responded to Ship & Bunker's requests for further comment on the matter.

The Japanese Maritime Self-Defense Force (JMSDF) has also not responded to a request for comment.

"The larger story in this era of Sam Bankman-Fried types is that certain jurisdictions are ideal for decades-long scams," Gawthrop told Ship & Bunker.

"Unfortunately, the UK is such a jurisdiction and the NFIB is reduced to a neutral complaint collector with no budget to act.

"The perpetrator continues to carry on with impunity.

"This means that Ship & Bunker alerts constitute the very least that can be done to avert traps for the innocent."

Ship & Bunker is continuing to investigate the alleged scam.

Readers who think they have been targeted by this individual or affected by similar situations in the past can contact the editorial team in confidence at editorial@shipandbunker.com.