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Fraud Alert

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MMA has been made aware of unscrupulous propositions being made to manufacturers. To keep members aware, MMA has compiled the information and will post it here for you.

National Effort to Counteract Theft and Fraud Underway

The Lewiston, Maine Police Department contacted MMA to indicate that it was working with the FBI to develop a case to go after unscrupulous scrap dealers and scrap thieves. The problem has been escalating in many areas of the country.

If you have had contact with your local law enforcement agencies after visits by fraudsters or thefts of property, please let the officers you worked with know about the Lewiston Maine/FBI effort.

The contact in the Lewiston PD is Roland Garbo. He can be reached at 207-795-9000 x228.

Potential Fraudsters Show Up in Missouri

A company in rural Missouri called 12/10/07 to report that two men operating as National Industrial Buyers (see the 1/25/07 entry) came around offering to buy their scrap. One man produced a wad of cash presumably to impress the company or encourage a quick sale. The company representative had a bad feeling about the men and their methods and declined to sell.

Tool and Die Sales Representation Fraud Suspected

A tool and die company out of Grandville said 8/6/07 that it suspects that Amex Enterprises (Louis Uritas) is a bogus company. Amex “has been going around collecting $1500 ‘retainers’ for sales representation in Mexico” says the tool and die company but calls to Amex go unanswered after the retainer is provided. The Amex Enterprises Web site is www.lasalesusa.com.

More companies suspected of scrap metal fraud

Another manufacturer — this time in Clarksville, Tennessee — called 1/25/2007 to report two suspicious scrap dealers operating under the names Tristate Liquidation (with a Michigan address) and Nationwide Industrial Buyers. (MMA had sent its first alert about potentially unscrupulous dealers 11/3/06.) Management at the Tennessee company indicated that the dealers came to their plant on separate days but may be connected.

In checking the information provided by the first company, Tristate, on its business card the business address could not be verified and the phone number provided was a cell phone. The fax number Nationwide provided was the fax for a retail store and again, the phone number was a cell number. Neither company was listed in Better Business Bureau nor other listings the company checked.

The dealers asked the manufacturing manager several questions, including what hours the company was open, indicating they may have been more interested in what hours the company was closed. Both dealers appeared at the back, loading dock door.

The company informed local police about the dealer visits, concerned about the possibility of theft over the weekend.

Florida companies reporting issues

A corporate purchasing manager with a company in Volusia County Florida called 12/13/06 to report that Frank Marks with Amerimex visited him and tried to work a similar deal as described in the alert sent 11/3/06. While the company did complete a deal for equipment with Marks for cash (which was not counterfeit), he became very indignant when the company insisted on doing due diligence before entering into a second deal for scrap on a subsequent day. Marks came with more cash and a truck and tried to bully the purchasing manager into making a decision immediately. He threatened to cancel the first, equipment deal if the firm didn’t give him their scrap that day.

Again, the caution that bears repeating is know what your scrap and used equipment is worth before selling it to a dealer that you have not contacted first.

Scrap Metal Scam Alert

Sent 11/3/06 to MMA members

An MMA member located in the Detroit area, called this morning to warn other members of a potential scam involving scrap metal. Please be aware of this situation…

The member company was visited by a group of three well-dressed “businessmen” who presented themselves as Ameramex Surplus, out of Brownsville Texas. The Ameramex representatives offered a very high quote to take the company’s scrap metal and used machinery. Ameramex wrote up an estimate and left it with the company to consider for 24 hours.

When the company invited the Ameramex group back in to talk further, the men then offered to buy the company’s used carbide for cash — and take it that day — for a rate that was far below its worth.

The company had asked that Ameramex wire transfer the funds for the first scrap buy into their account before picking up the used metal and machinery. Ameramex had agreed but the company suspects that what the group would have done is take off with the valuable carbide and never make a payment for, nor pick up, the remaining scrap.

The member company had sensed this may be a scam because 1) the Ameramex representatives didn’t take a copy of the estimate they provided in the first meeting; 2) the group’s first offer on the scrap was “preposterous”; 3) the company got a “wrong number” answer when calling the cell phone listed on the Ameramex business card; and 4) the bait-and-switch type of situation they set up at the second meeting.

Please contact MMA, at 517-487-8543, if you have experienced a similar situation so that we can keep members informed.

Please note: The “Ameramex group” hands companies a professional-looking business card. [pdf file]

Several MMA members responded that they had been approached in the same or similar fashion.

Another company representative had this to say…

As a metal finisher located in the City of Detroit, I have dealt with numerous situations such as this. We have been subject to the theft of heating and cooling units off our roof simply for the purpose of being sold as scrap to an unscrupulous scrap yard. Our streets in the area are missing sewer caps and the scrap yards are buying them from the thieves that remove them.

In response to your request for similar situations, there is a “normal” technique that some of these “recyclers” use to perform their rip-off. One person will enter the office or the plant and ask for a person of responsibility. While they occupy this person, another person will enter the plant at a different location and either begins the act of theft or gets a worker to begin loading material into their trailer. They will tell the person that they have permission by pointing to the person talking to a responsible party. The worker then assumes they are legitimate since they are talking to a responsible person at their facility.

The other is that they are Native American Indians and they are collecting scrap to melt down to make belt buckles and trinkets for the orphanage on the reservation. They will offer to send you a “gift” made from the scrap you provided them as a thank you. Obviously if you fall into this situation, you will never see a gift and while they are explaining their proposal, another one is looking through your facility setting up the theft of either scrap or machining tools/bits. We have a contactor who has been robbed of over $8,000 worth of carbide cutting material.

Hope this helps, but the bottom line is that no one other than employees or supervised visitors should be in your facility. Employees should be instructed to notify a manager or supervisor if they notice anyone in the facility that does not work there, and anything to do with scrap metal is usually going to end up being a loss to the company if they do not have a program in place already.

And another reported this….

We were ripped off for $37,000 worth of copper obtained by an ex employee claiming to work for us and using false po’s. Our vendors, without checking, allowed the man to go in and use our account to place many lengths of copper in his van then he pulled away. He signed other employee’s names to the paperwork. I have been to court twice because the larceny occurred in 7 different cities and three different counties. I could go on and on, but in regards to your note I appreciate it and would be glad to discuss with anyone how to avoid this scam. The scrap yards need to start to taking responsibility as well.

This representative of a member company in Jackson provided this “heads up”…

Be aware that these “snake oil salesmen” also use these occasions to “case” your business to potentially come back during off hours and steal any precious metals they have confirmed that you have.

And another member had this say add:

Having read the latest related to scrap metal scams, I can confirm the “American Indian” story. The same thief sat in my office and explained that my father had always contributed scrap, why don’t I. (He obviously didn’t know my father!) If they are in your office, you can be certain they are at the back door also. They don’t go away easily. I am going to begin to document vehicle license numbers. Because of our name, National Bronze (nationalbronze.com), we have these guys coming in almost daily. Lately there has been a guy that comes to the back door (not the office). He offers to buy our scrap at a price considerably higher than the mill will pay. He pulls large folds of $100.00 bills out of his pocket. He claims he will pay cash on the spot. He is very aggressive and cunning. I don’t do business with anyone that comes unsolicited. I can only imagine that the cash is counterfeit? Thank you for the heads-up.