Business Scam in Guilin, China

Posted on 25. Oct, 2010 by in beyond LatAm

This story was published almost two years ago on my other blog as ‘Chinese Business Scam’. Expat Chronicles is my only blog now, and I thought it’d be a nice primer for the next few posts on China.

I listed a Peruvian company’s products on Alibaba – a B2B website meant to match suppliers with buyers. I received an email one day from a distributor in Guilin, China. As always, I replied to “Kylie” with product info and pricing. She requested samples a few days later. I Googled the company. No website but a dozen or so hits on market-research sites, so I sent the samples. Weeks went by. I sent an email to confirm they received them. Kylie replied saying she did and that they needed to administer a “product test”, which can take up to a month.

More than a month went by and I asked her if everything was OK. She said they were still waiting on the test results. She told me she would have more information in 2 – 4 days. Some two weeks went by and I forgot about her. One day, out of the blue, she emailed me a purchase contract with an order for $250K. In the email, she asked for somebody from the company to come to Guilin, China to meet face-to-face and sign the contract.

The company GM looked over the contract and said everything seemed OK. I started looking into Chinese visas while emailing Kylie about certain issues – primarily Mandarin translations for the packaging. We didn’t want to discuss or change packaging after the contract was signed because it would be hard enough to fill the large order in the stated lead time. We wanted to know exactly what languages would be on the packages before we went to China. Kylie danced around the issue and said we can discuss it face-to-face.

Somewhere in all this mess, I decided to Google-search the company again. Same results (not much). I don’t know why I did what I did next but I thank God I did. I Google-searched “Guilin China scam.” Dozens of results came up with titles like “Chinese Internet Scam – Buying Center & Trip to China” and “Guilin China Fraud.”

I clicked and read. The links were forums (many on alibaba) describing the following scenario. The scam is to lure small and medium-sized businesses to China under false pretenses of signing a purchase contract for a large order.

They pick up the victim at the airport and take him to the 4 – 5 star hotel they had reserved for him. They take him around town to breakfasts, lunches, and dinners while talking business. The decision-making manager has a young female to translate for him the whole time. He negotiates hard and the deal slowly develops. Meanwhile, the Chinese are earning percentages from the hotel and all the high-end restaurants they take the victim to. (I assume the victim pays the bills because he is trying to win the customer’s business. Maybe the restaurants give them different menus with higher pricing because they know in advance who is coming).

At the end of the victim’s trip, the decision-maker signs the worthless contract. The victim is happy. The decision-maker says it still needs approval from the finance manager. Would the victim like to buy the finance manager a gift to win his approval? Sometimes the victim refuses. Sometimes the victim is thrilled about the deal and agrees. The victim is taken to an art gallery full of pieces that cost $10K – $30K. After buying one, he is told he can give it to the finance manager the next morning (the victim’s last day). The next morning, he is told that an emergency came up and the finance manager had to fly to Beijing. But the victim can give it to him when the finance manager visits the victim’s factory next month. The victim never hears from anybody again. The art is worth a couple hundred dollars.

As with anything, there is fraud on alibaba. If I see a message from Nigeria or Togo, I don’t even read it. I’m accustomed to what the scams look and read like. But this didn’t feel like one. I dealt with this woman for almost three months before she placed an order. She asked skeptical questions and made me work for the deal. They wait so patiently, and at all the right times. There were no red-flag concessions like paying for a distribution license or granting credit for the first order.

There are a lot of people who made the trip and described the scam in the forums. One particularly angry victim is gathering evidence in an attempt to bring them to justice.

I didn’t immediately halt communication with the Chinese. I thought of ways to get something out of them – revenge, if you will, for trying to take advantage of me. I knew they wouldn’t ever pay any money for anything. I pressed harder for Mandarin translations. I told them we applied for our visas but the GM decided he absolutely will NOT get on a plane until we have Mandarin text for the packages. They finally sent translations to me this week. I had a Mandarin-reading friend look them over and they are accurate! At least I wasted some of their time and got their hopes up.

I wasn’t done yet. I decided to take it a little further. I picked a flight from LAX into Guilin and told Kylie that we’d be on it. I finished the email with something like, “Look forward to meeting you and starting a successful business relationship!”

Kylie emailed me after we didn’t show. I replied with only the link to my new blog post. Her reply to me:

Dear Colin,
I do not know your meaning. why do not you come here ?
Last night we wait for you at the airport for a long time, but do not saw you. Anything is ready,would you tell the reasons, is ok?
You know we book the rooms for you and prepared the gifts.
My boss have reproach me, I hope you will give me a reasonable explanation.
Thanks and best regards,kylie

HAHA!

Here and here are two of the better comment threads with stories from victims, would-be victims, and even former employees of the fraudulent companies.

Images of Guilin, China:

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19 Responses to “Business Scam in Guilin, China”

  1. Jeremy A

    26. Oct, 2010

    Wow this is great! I do business on Alibaba with my proofreading/translation service, and the place is ridden with scam artists. Wish I could have seen their faces!

  2. Andrew Meyer

    29. Oct, 2010

    Great story. The Chinese are great businessmen, of all ilks.

    BTW, have a great Halloween in China, they have some great Halloween parties over there.

    Keep making me jealous!

    Andy

  3. Ken

    08. Nov, 2010

    Loved ur story I have plans of my own for revenge, below is my story …

    Do not trust companies listed on made-in-china.com for example “Hangzhou Weifeng Electronics Company Limited (MR. LUIS PENG)” or “WH HuangChao trade Co., Ltd” – xinxinxr.com or any site referred by made-in china.com. This rule does not only apply to made-in-china.com, all Chinese sites are extremely corrupt and full of scams and should be dealt with using great care to detail.

    For an extensive list of Chinese scam sites see –
    http://www.firetrust.com/en/blog/chris/the-bigger-list-of-chinese-scams

    IN BRIEF –
    The scam involves the victim joining a website for example, made-in-china.com. The victim browses sites for products & info, the victim sends emails via the “made-in-china.com” website to contact alleged legitimate supplier/scammer for pricing & details. Very soon after these enquiries are made, the victim is contacted by the scammer who is in reality one of the sites contacted earlier for details. The scammer uses a fake email address very similar to the site you have joined that is,: made-in-china.com recommendation comittee@ gazeta.pl or similar whereas a real address would be liangchao@ made-in-china.com. The aim is to make you feel like you’ve been contacted by “made-in-china.com”. The fake email welcomes you to “made-in-china.com” and goes on to advise you not to buy from any companies until the “Recommendation Committee” has done company checks for you as they have had problems with both buyers & sellers. If you miss the address anomaly then you are at the mercy of the scammer. He can and does recommend his own non-existent sites, you order from the recommended sites and pay by Western Union which the false site insists on for initial small/sample orders. A false tracking number is supplied to the victim but nothing actually gets sent, the scammer claims the goods got sent to Nigeria and so on but you’re in Australia. He asks for more money to resend to you and so on … or alternately you get something entirely cheap, nasty & different. The list of scam variations goes on …

    For my full story see
    http://forum.firetrust.com/viewtopic.php?f=40&t=8028
    Regards
    Ken

  4. Steve

    18. Feb, 2011

    I had a problem with another Chinese company that stole from several people, me included. I wired transfered funds for merchandise and never got it or heard from the people again.

    Here is the banking info of the thief I sent money:
    Bank Name: Bank Of China
    Bank Swift Code: BKCHCNBJ73C
    Payee Name: Huifeng Tang
    (First Name:Huifeng; Last Name:Tang)
    Bank Account: 4552304-0188-056434-4
    Payee Address: No.269,Renmin Road,Changge,Henan,China

    This is the person I emailed and his name:
    Mr. Andy Huang
    cnjiuhui05@hotmail.com

    Ph # given 86-1509-320-7196

    Let me know if anyone knows how to catch these con artists

  5. STEPHANIE

    31. Mar, 2011

    Hey there,

    Well, it’s been a while and I’ve almost written it off but, I HAD the EXACT experience as you and actually DID go to Guillin! yES they are very patient and the emails came and went and came back. EVERYTHING right down to the young women translators and buying a painting. AND BELIEVE ME I DID MY HOMEWORK… even had an attorney in Beijing. OMG! I must have been one of the first round to bite because there wasn’t anything on the internet I nor my attorneys could find.

    The good news is, I had a blast other than getting ripped off and all in all, I just paid for the trip.. didn’t send them any product. They got us to pay for everything because they promised to pay us back when the contract was signed. Thing is, it was IMMEDIATELY fishy but hey, we were already there and seriously jet lagged so what are ya gonna do? sleep in the street????

    Really amazing. Even more amazing to go thru so much trouble for what seems like a small amount of money in the bigger scheme of things. They did however have a steady stream of people at the airport and we were NOT to stay more than 3 or 4 days… At one point, we, my brother who is a business man and my sister in law and I got SICK of this scrawny Chinese girl following us EVERYWHERE!! TOUR GUIDE? I think more like… keep and eye on US guide… she wasn’t a day over 17. We ditched her the morning AFTER we signed the contract , SHE WAS A NERVOUS WRECK calling my cell constantly… )Meantime, we just wanted to do our own thing so we hiked all over the place, in fields and farms where tourists don’t normally go… hitched a few rides on bamboo boats and at one point, ended up by chance ( lost in the fields) across the river from the very museum where we bought our painting… THE NATIONAL TREASURE we called it… $7,000.00! We went into the museum after hitching another boat ride and checked it out.. managed to get them to let us upstairs where the ‘expensive’ art was… thinking, let’s make sure that painting isn’t back there… whatever, we’ll never know for sure but there was still a space where the one we bought had hung.

    Now I know why all the people working with us were nervous wrecks and had major acne and rashes! PROBABLY WORRIED THEY’D GET CAUGHT AND HUNG!

    The last day, they actually paid for a great meal for US! In hindsight, I think they were a little worried about what happened while we were MIA.

    Actually kind of sad because they were all in their 20’s and maybe 30’s. I often wonder what happened to them. At the time, they were really pretty fun. I got one of the translator’s cell phone numbers. After I got back to the states, I kept calling the number because the office didn’t answer… go figure. She would put me at ease for a while, with excuses of why there was no transfer but in the end, she screamed at me to NEVER CALL THIS NUMBER AGAIN!

    OH MY…

    Hey, I HAD no plans to go to China any time soon before that… so, LIFE’S A TRIP!

    Stephanie

  6. DEEPEN MALLICK

    18. Sep, 2011

    This is to bring to the attention to all concerned about the Fraudulent Act by ANTAIRUI CHEMICALS CO LTD TIANJIN for having cheated our buyer Anav Trading LLC; USA by not supplying goods against full payment.
    Order was placed for PE Virign Resin by our buyer AnaV Trading LLC; USA (Order copy attached) for supply of 1 MT of HDPE and LLDPE with full payment of $2770 transferred to their Bank Account BANK OF CHINA TIANJIN BRANCH; 80 JIEFANGBEI ROAD HEPING DIST. TIANJIN CHINA (ACCOUNT NUMBER: 280461253781).

    Many attempts were made to contact this Company without any success. We are much concerned of such fraudulent act by this Company and we hereby appealing to all concerned to help us in tracking down this Company in recovering the damage.

    We appreciate all concerned for their help is this regard.

  7. Moses

    09. Oct, 2011

    i have been scammed $1000 each by these two companies, egroupdigital.com and diywtc.com. They are,anybody who knows these company should not do be ware,thet are fraudsters.

  8. Mike

    21. Feb, 2012

    Wow good thing I read this before actually going to china…

    I found a seller on Alibaba that claimed to be a CNC machinery manufacturer,

    They had a machine that would usually cost 60 to 80 Grande here in the US, but that’s from a second party middle man! She gave me a price that’s believable if it’s coming directly from the manufacturer.
    It’s very hard to buy thing directly from the manufacturers here in America that’s why the business man in all of us hopes we can meet a good supplier.

    When I inquired about the machine we talked back and forth for over 3 months. These scammers are very good at making it seem like they are a legitimate business, taking requests and customization down to the last mm, they seem to know what they are talking about so I would not be surprised if they actually work in the industry…

    After I sent them all the specification for the cnc router machine and everything seemed to be ready to process, the sales manager
    “Peggy Gao”
    Sent me a Proforma invoice witch looked like a joke, the company logo looks like it was cropped in using the paint program for windows!!!
    Ms.Peggy claimed she needed 50% of the payment upfront to begin manufacturing the machine and asked me to go to China to learn how to use the machine, she wanted a bank money transfer for some of the money, and she claimed when I got to china I could pay the rest

    Here is the bank info she gave me

    BANK INFORMATION: Beneficiarys Banks Name: BANK OF CHINA LINYI BRANCH Bank address: 228 YIMENG ROAD LINYI CITY SHANDONG CHINA SWIFT CODE: BKCHCNBJ500 BENEFICIARY: Linyi Chaoda International CNC Technology Co., Ltd. Account Number: 384002850318093001 Tel: 86-539-8330719

    I never went to chine and have stopped all contact with Linyi Chaoda International CNC Technology Co, in fear of getting scammed for allot of money

  9. Michael

    02. Mar, 2012

    Hello mike, I cooperated with Peggy Gao for 3 years.
    she is a very professional lady ,
    yes ,her company name is Linyi Chaoda International CNC Technology Co, .
    we found them on alibaba , and did very happy business , their CNC Router machine looks good.
    i have been to China and visited their factory 2 years ago , very big factory.

    every time before order, Peggy used to send me a proforma invoice for pay 50% money. it is very common. don’t worry !

    EDIT FROM COLIN: this comment came from Beijing, China.

  10. Christos

    10. Apr, 2012

    hello
    i am a victim by a company with the name:
    ..bluesky ELECTRONIC HK CO. LTD..
    they are scammers.. watch out everybody
    they took my money but they never send my order. i send the money with western union. can i take my money back?
    there is something you can do?or something i can do?
    B.R.
    Christos

  11. Marvin

    28. May, 2012

    Man, Here I am on the pc looking for something to buy hee in China, and I come across this, I am so glad for all the info. I;am from us and I married a beautiful lady here in Guilin China, so this is my4th trip to China and I love the culture and all the old buildings and for the most part, the people have been very good to me. I think maybe I need to try to help people who want to buy things in Guilin, I have one more month here before I have to go back to the states. I know that this email will show coming from Guilin, but believe me I am 62 years old and to old for any of this crapp that has happened to all of you. Good luck and if I can check out anything in Guilin, please let me know. Thanks Marvin

  12. Mark

    29. Jul, 2012

    I’ve received a large order in the form of a contract from a company called XP Group Limited in Shenzhen. The order came through last week and it was for a big amount of nearly $800k US dollars. They have said they’ll make payment of 30% of the contract value. I’m due to meet them in Shenzhen in two days and now I think I’ve made a huge mistake.

    Any thoughts??

    Mark

  13. Brian

    31. Oct, 2012

    I won’t go into a lengthy discusion about my experiances with the Chinese scams because some of you have lost much more than I. Personally, the $78 I threw away on a sample jewelry item was money well spent to prevent me from ever trying to do business with China or any other foreign country. In the future my company will only deal with US companies regardless of the differences in manufacturing costs, etc. I was a sucker once, that’s on me, there won’t be a second time.

  14. youhi

    05. Sep, 2013

    In this site we expose most popular scam companiese of china
    who scam innocent peoples by providing low rates of
    expensive things.

    http://chinesescamers.blogspot.com/

  15. Sam

    11. Nov, 2014

    Just to detail out another scammer appear to be manufacturer of electronics goods in China –

    UMINE TECHNOLOGY (HK) CO., LIMITED
    Address – Huaqiang Road Metro Station beside ,Futian District, Shenzhen PRC
    Skype: zhang.xiaoxuan Phone:0086-15627456393(33136393)
    email:ada@usb-flashdrives.com Site: http://www.usb-flashdrives.com
    HSBC A/C number – 819 260654 838
    Bank of China A/c Number – 6217 8620 0000 0847 989

    I had paid them 50% advance i.e. $525 USD for supplying microSD crads and received pieces of plastics instead. Tricks are very common and they were successful in their attempt as I was new in the market and did not care to research very carefully and transferred fund to their Bank account directly.

  16. You’re so cool! I don’t think I’ve truly read a single thing like that before.
    So nice to discover another person with some unique thoughts on this topic.
    Seriously.. many thanks for starting this up. This web
    site is something that’s needed on the internet, someone with a little originality!

  17. Lito ocampo

    09. Nov, 2015

    Please do not trust this, this is a certified chinese scammer

    HAN ELECTRONIC CO. LIMITED is a professional supplier for all kinds of world famous IC electronics components, our company has achieved great successful businesses from all over the world based on best quality ,competitive price, fast delivery and excellent after-sale service. Pls offer us a chance to service for you!
    Any more questions or concerns, pls feel free to contact us.
    Best Regards
    Lucy
    HAN ELECTRONIC CO. LIMITED
    Tel:852-55340142
    Fax:852-55340142
    Email:hanelec@126.com
    Skype/MSN:hanelec@outlook.com

  18. sun

    22. Sep, 2016

    Alibaba is the hive of scam gold suppliers. and Alibaba dont care buyers.

    so better dont go to Aliexpress or Alibaba.com

    the support is very bad. and process dispute is a joking

    many scam company same shenzhen jumbo power saver ,

    i buy power saver and i try test with meter 1 room with 2 airs conditioner

    3 hours meters without power saver 4.5 kw/h

    3 hours meters with power saver 5.6kw/h

    total i make 5 test 5 different s places

    So easy understand with power saver jumbo you don’t save you eat more kw/h when you use

    power saver jumbo.

    we not recommanded buy product to Alibaba , Aliexpress and nevers buy
    product for jumbo also i ask jumbo him product is not save so is are
    scam product , him reply me Fuck you.

    i contact is seller and transfer data.

    and is produce is for save electric , power saver , after 5 days testing differents place.

    i understand jumbo power saver is are scam product. 1 him not save,
    and when you test with the power saver you meter inscrease the kw/h

    the best solution

  19. NiTIN

    04. Jun, 2017

    BEWARE OF THESE MAILS

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