Oil, Metals and Other Commodities: The New Bait in Russian Fraud

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Oil, Metals and Other Commodities: The New Bait in Russian Fraud

Russia’s economy is highly dependent on exports of commodities with revenues from sales of crude oil, petroleum products, metals such as iron and steel, and precious metals. All of the above are in high demand in developed countries, which is why the trade of these products is such an attractive business for investors, as it is for scammers too. There is significant profits to be had when investing in Russia, but it is also a very high risk country for fraud, and due diligence is essential.

“The commodity market is a high-risk investment if proper due diligence is not exercised,” says Charles Wright, Due Diligence Director at Russia PI. People and companies can lose their entire investment rapidly when the verification process is disregarded or left for the last minute. Russia is definitely one of the best places to go look for a new business deal, but is important to keep in mind is that investment scams are an unfortunate reality that you need to get prepared for if you want to stay safe. Whether you’re an intrepid investor looking for big ROI or looking for a safer investment, investigating the company you deal with is the best idea. Company verifications and due diligence are key.

How can you tell apart a scam from the real deal?

Investment scams sound and look completely believable. Fraudsters are aware that their target are mainly company executives and investors, with education and experience in the commodity trading business. Therefore, they know they need to make an effort to make the deal seem real. Oil and metal scams are carefully designed and managed by criminal groups in Russia. Mafia rings use fake sales agents, brokers, websites, and forged documentation. They have even created their own online history and reputation through press releases and information published by themselves. Telling apart the real deal from a scam is complicated in this scenario. When you add up the eagerness that most investors have of being part of an incredible financial success, you’ll end up recognizing that falling for a scam is a matter of seconds. It takes a local private investigator in Russia to really uncover a fraud case.

How to avoid biting on the bait?

Information is the clue. When a buyer is in contact with a new provider, broker, lawyer or businessperson, the first step is to gather as much information as possible about the company and people they will be dealing with. Once the information is in your hands, the smartest thing to do is to hire a professional investigator to verify it. A company background check in Russia is key to safe investing because it verifies if the company is legally registered and in good standing with national laws and regulations. It is also important to verify if the broker or financial professional you have been communicating with has valid credentials to operate as such, if they have any criminal or court records, or even any disciplinary history in the entity that regulates their profession.

Conducting a thorough investigation makes all the difference. Never accept a business deal without taking the time to investigate, or without hiring the professionals that can provide real evidence. Contact us if you are planning to invest in oil, metals or other commodities in Russia. We can help you minimize the risks. Our Moscow based investigators can verify any company or representative.

The worst part is that many scammers remain anonymous and out of the reach of regulatory and enforcement authorities, making loss recovery almost impossible. This is the time when consumer education is a very important way to minimize the impact of this threat.