Key Characteristics of Fraudulent Companies in Steel and Metals

1. Fraudulent companies are typically newly registered entities established in recent years, often family-owned businesses. While their registered capital often exceeds 10 million yuan, it is entirely contributed capital, meaning no actual capital has been paid in.
   
2. After establishment, these fraudulent companies register multiple English-language websites, with some having as many as seven. They often disguise themselves as manufacturing facilities on their websites, featuring elaborate designs and displaying various certifications (such as ISO 9001 quality management system certification) and awards. While the company names on their English-language websites may vary, they ultimately use a single company name as the payment account.
   
3. The fraudulent company’s sales staff frequently changes, but it continuously posts job listings for sales personnel on recruitment websites like BOSS Zhipin, hiring sales staff to conduct extensive marketing and SEO on international internet platforms like Google, Made-in-China, and Alibaba International, and massively post metal material supply information to attract overseas buyers.
   
4. The fraudulent company’s supply prices are often below market prices (and may even be below the production raw material costs of factories).
   
5. Fraudulent companies acquire customers (overseas potential buyers) through these internet platforms, then require offline signing of supply contracts with overseas buyers, demanding that overseas buyers pay a deposit offline, with the balance typically settled after loading or before the ship departs.
   
6. Fraudulent businesses often use offshore companies as the seller in the contract (the English transliteration of the offshore company’s name is similar to its domestically registered Chinese name) and offshore accounts as their bank accounts for receiving payments. We have discovered multiple cases where the offshore account was opened at Zhejiang Chouzhou Commercial Bank in Hangzhou (such accounts are also referred to as “NRA accounts”).
   
7. Currently, such fraudulent methods have formed a scale effect for making illicit profits in Liaocheng, attracting more local unscrupulous merchants to register and establish similar companies for fraudulent activities. To avoid regional identification, some have relocated their operational offices from Liaocheng to the business district of Jinan City.

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