Fraud Story 5 – Unveiling a Logistics Conspiracy: A Comprehensive Examination of Fraudulent Practices

Part 1: Execution of Contracts with Transport Vendors

The foundation of any sound logistics operation lies in the establishment of contracts with reliable transport vendors. Here, contracts were ostensibly signed with vendors of various capacities, including the perpetrating entity, to obfuscate any suspicions. Notably, some contracts were deliberately left unsigned, while others were allowed to expire without renewal. Rates for transportation were intricately tied to factors such as vehicle size, weight, and destination, creating a complex web of deceptive possibilities.

Part 2: Strategic Deployment of Trucks in Proximity to the Factory

At the core of the fraudulent operation was the strategic placement of trucks near the factory. Operating within the unorganized sector, these trucks engaged in undisclosed agreements with transport companies. Covert manipulation ensured that trucks associated with the perpetrating entity would be selected for stock pick-ups.

Part 3: Manipulation of Truck Allocation Procedures

The company operated on a system where the rates of the top three vendors would be displayed based on the trucks entering the factory for the pickup of goods. While the top three rates were visible, the discretion to choose the vendor for the pickup rested with the booking desk. However, a critical shift occurred in this process.

The individual at the booking desk was directed to select a specific vendor, one that had been pre-determined. Ameer, the logistics head, played a pivotal role in this manipulation. To fortify this deceitful manoeuvre, Ameer altered the system controls, ensuring that selecting the 2nd or 3rd highest-priced vendor wouldn’t trigger the standard workflow process. This manipulation was facilitated by the admin access granted to Ameer at the tool’s inception.

It is noteworthy that these alterations to the system controls took place months before the orchestrated events unfolded. This deliberate timing was aimed at veiling the fraudulent activities. Regrettably, Raja, the individual operating the booking desk, remained unaware of the intricacies of the system, unknowingly becoming a pawn in Ameer’s orchestrated scheme. In essence, Raja played the role of a puppet, unwittingly contributing to Ameer’s deceptive plan.

Part 4: Artful Manipulation of Material Loading onto Trucks

Before loading materials onto the trucks, the process involves recording the tare weights followed by the determination of gross weights, ultimately yielding the net weight. However, a manipulative practice came to light with trucks affiliated with the fraudulent vendor.

Drivers of these trucks received explicit instructions to artificially decrease the tare weight by removing additional items from the truck, relocating them near the gate. Subsequently, just before recording the tare weight, these items were reintegrated, artificially inflating the tonnage of the materials being transported. They orchestrated this deceptive maneuver to escalate the rates, as higher tonnage directly translated to increased transportation costs.