C&F toolmakers defrauded in Chinese bank scam

Galway-based toolmaker C&F Automotive has been defrauded in an apparent $428,934 (€385,947) scam after one of its Chinese suppliers had their bank account hacked and funds were transferred to a false account.

C&F, owned by John Flaherty, has used supplier Kingvow, in the Chinese city of Dongguan for many years. When paying an invoice on May 21st, the company was asked to pay into a different account.

The amount was transferred from China Merchant's Bank to a Hang Seng account in Hong Kong. However, while the paper trail to the account where the money has been channelled is fairly obvious, C&F has come up against faced bureaucratic challenges in China trying to get it back.

Lenders

C&F first went to the headquarters of China Merchants Bank – one of China’s biggest lenders – in Shenzhen, a neighbouring city of Dongguan, but the bank refused to speak to its lawyers.

Then they went to Shenzhen police, where again there was little co-operation for many hours, until an officer said the money had been transferred to a bank in Jinhua in Zhejiang.

The money subsequently ended up in Hong Kong, where the local police were willing to help, but could do nothing without an official statement from the police in Dongguan.

The key problem appears to be a lack of documentation by the police in southern China, which the Hong Kong police need to follow up the funds.

The documentation provided by the mainland Chinese police was short of adequate, C&F sources said.

Refusals

C&F’s representatives complain of repeated refusals over six days to open a case file about the missing money, although they said that moves by the embassy in Beijing had started wheels in motion.

In April, Ryanair was hit by a criminal scam in which about $5 million (€4.5 million) was taken from one of its bank accounts by electronic transfer via a Chinese bank.

The Criminal Assets Bureau in Dublin was asked to assist in its recovery via counterpart agencies in Asia. Gardaí have reportedly contacted Interpol but nothing can happen without movement from the Chinese police.

“This case has been a nightmare. We have encountered only problems on this side from the Chinese banks. We know where the money went, the Irish banks are investigating, and the embassy in Beijing is involved,” said one C&F source.

“Our lawyers keep trying and failing to get information from the Chinese police,” he said.