Investigations in Middleman Fraud | Identification and Conviction of Middleman Fraudsters

Even though the fraud type known as middleman fraud is not necessarily familiar to most German citizens, it is nevertheless quite widespread. Middleman fraud is an organized-gang merchandise fraud in which the perpetrator or perpetrators appear to the victim as a buyer, seller, and/or intermediary for goods. By communicating high profit prospects and often completing an initial small transaction successfully, the victim is drawn in as an intermediate purchaser for the sales process and is thus “spun into” the machinations of the fraud gang (it is presumed that the term middleman fraud actually derives etymologically from the German “einspannen,” meaning to harness or involve). The scheme then usually involves larger sums or goods values, the victim is required to advance money, and the perpetrators disappear after receiving the amount, while the victim is usually left with a substantial loss.

The many years of experience of our economic detectives from Berlin teach us that the victims of middleman fraud do not necessarily have to be gullible, economically inexperienced youngsters; rather, the fraud gangs involved sometimes act with such a mixture of ruthlessness, experience, and sophistication that they can deceive targets from all walks of life and all types of businesses. From the Hartz IV recipient or student hoping to earn a little extra money on the side, to the homemaker seizing a chance at easy income, to the shareholder of a DAX-listed company – they have all already been seduced, drawn in, and ultimately stripped bare by middleman fraudsters.

Not a New Offense – Middleman Fraudsters Have Been the Subject of Media Coverage at Least Since the 1950s

A well-known and quite far-reaching case of middleman fraud originated at the beginning of the 1950s with a gang of art dealers turned fraudsters who brokered supposedly valuable works of art to wealthy European industrialists and merchants, making them believe that they could achieve high profits by reselling those works of art to affluent South Americans. Not only these profits, but also the prospect of possible capital investments far away from the threat of domestic currency devaluation, increased the willingness of various businesspeople to enter into the deal and purchase the artworks. But hardly had the sums been transferred than the supposed art dealers disappeared, sometimes even with the paintings and sculptures, sometimes without them. The buyers of the artworks were thus left either without money and without art, or without money and with inferior artworks that would hardly have enticed any buyer from abroad (or even domestically), especially not at sales prices in the range of the purchase price.

Fraud gangs have remained active to this day with such schemes and many variations on the same basic idea. Their victims should not despair, but instead turn to the experienced Aaden Detective Agency Berlin for help.

“Caution, Trap!”, the classic German TV format against scam fraud, on middleman fraud:

How Does Middleman Fraud Work? A Case Example from Aaden Detective Agency Berlin

Peter F., a client of our Berlin detectives, was approached at an economic congress by the supposed business consultant Hans G. and was told about a secure, fast profit opportunity through participation in a business deal. Acting as an intermediary between the seller Hans G., a supplier, and the buyer, F. was to receive goods and then resell them profitably to the buyer. F. believed the claims and hoped that this “one-time deal” would help him supplement the savings for his upcoming wedding. For this purpose, he only had to purchase goods worth €3,000 (in this case valuable electronics) as an intermediate buyer, which were then to be resold to the buyer at a much higher final price.

Since F. had already successfully completed a smaller transaction involving two laptops, meaning at a profit of €200, he trusted both G. and the buyer. But as soon as the higher amount for the new deal had been paid, the supposed business partners cut off contact, and F. suddenly found himself without money, without goods, and without anyone to contact. When he turned to our private detectives in Berlin, the perpetrators had initially already vanished, but after several weeks they were caught in the act during another attempted deal. The proceedings are still ongoing.

Why Do Many Victims Not Call the Police?

For one thing, victims of middleman fraud often feel uncomfortable and sometimes even embarrassed when they have fallen for such a scheme, especially if they themselves are experienced in business and should have known better; losing face in front of a spouse, family, and business partners also keeps many affected people from pursuing criminal charges against the perpetrators. In precisely such cases, commissioning our Berlin detective agency provides a discreet alternative. For another, the perpetrators sometimes act so plausibly that the disappearance of the buyer’s interest in the goods acquired from the fraud victim does not raise sufficient suspicion. Their withdrawal motives, for example, are explained by a delayed delivery, the existence of a better offer, or other reasons that are quite understandable. In the end, many victims do not even realize that they have not simply miscalculated, but have fallen victim to fraud and that the other parties involved were in fact criminals.

Moreover, the supposed deals are usually arranged in such a way that they would have taken place “under the table,” that is, off the books, thereby exposing the victims to self-incrimination in the event of a criminal complaint. In such constellations, most victims prefer to keep silent about the matter, or they inform private investigative services such as Aaden Economic Detective Agency Berlin instead of the police in order to commission them with address and contact research on the perpetrators, so that, in the best case, the funds obtained under false pretenses can be recovered – usually through the threat of legal action. If this does not succeed, those affected still retain the option of pursuing a case against the perpetrators with the court-admissible evidence we have ideally produced. With skilled legal representation, it may even be possible to conceal one’s own tax-law misconduct intention while at the same time obtaining justice against the fraudsters.

Commissioning Aaden Detective Agency Berlin

If you have become a victim of middleman fraud or if you suspect someone of being involved in such illegal machinations, you may commission our Berlin detectives at any time to investigate the case. We work for you around the clock, investigate from multiple perspectives, and all evidence we provide is admissible in court so that you are legally protected as the client. With detectives ready for deployment throughout Germany and abroad, many years of experience, and a wide range of investigative methods – surveillance, digital and analog research, legend building, IT-forensic trace analysis, and much more – we are well equipped for (almost) any assignment.

Please feel free to receive free and non-binding advice from our economic investigators and private detectives in Berlin, taking into account your room for manoeuvre regarding sensible courses of action. You can reach us via our contact form, by email (info@aaden-detektive-berlin.de), and by phone during business hours (Monday to Friday from 08:00 a.m. to 7:00 p.m.) at the following number: +49 30 2016 9221-0.