Got an email the other day from the owner of a leading Northwest interior design firm. This person who has asked to remain anonymous, wanted to tell me about how he and his company had been scammed, so as to prevent others from suffering the same fate. 

My response was to say that we have written about this very scam a few times previously but that it has been long enough since the last one that we would do it again.

Here goes.

I want to tell you about what happened to us for the sole purpose of allowing other small businesses the chance to find this thread when searching for information on business opportunities in China, specifically Kunming in my case.

In August, 2014 I was contacted by Mr Chen _________ with the opportunity to complete interior design drawings for 56 luxury villas in Kunming.

This is the official headquarters information the scammers are using on emails: [we are leaving out the specific identifiers on the off chance that the Chinese individual and alleged company have some explanation.  I say alleged company because I would be that there is no company.]

Like many of our larger new jobs, we are expected to provide our own transportation to the first meeting. I did this by flying from San Francisco to Kunming to meet with the fraudulent company. Upon my arrival to Kunming, I was picked up by a driver and taken to my hotel, the next morning Mr Chen met with me to review the contract and the site plans. I was then taken to lunch and we discussed any changes that would need to be agreed upon with the extensive contract (written in english). At the end of lunch I was told there are some Chinese cultural differences that we must honor and one is providing gifts to the local authorities and banker. They suggested I buy 50-60 cartons of very high end cigarettes for this purpose.

At this point I had my first hint that something felt odd, but then the day was filled with a site visit, a presentation in a large conference room of my portfolio and their feedback on the likes/dislikes of the interior design. So I felt maybe they were trying to get some cigarettes from me but the project of designing 56 luxury villas in Kunming seemed legit.

The next day I met more members of the organization and we signed the contract, took celebratory photos and had a dinner with 5-6 other people that evening. I was never asked to pay for any transportation or meals/drinks while in Kunming as the host paid for these items.

Upon getting back to the US, I provided my banking information for the wire transfer of the first payment of 20% of the project before starting the work. The next few emails were from _________, Financial Manager of Yunnan ______Construction & Engineering and this is when I knew they had an elaborate scam going with interior designers. They wanted me to provide a remittance fee to ______ bank account, since this couldn’t be paid from their “corporate account.”

I had done extensive research before buying my plane ticket and I couldn’t find any negative or contrary information about the project, so I was optimistic about the project. But after receiving the emails where they are asking for large sums to be deposited to their private bank accounts I then began to search again and this new thread popped up.

I’m not sure what can be done to these people from so far away, but I’m hoping this post will help enlighten others of the scam and fraud that these people are doing in Kunming under the disguise of developers looking for interior design or interior decoration from foreign companies.

I then asked for information regarding exactly what this Northwest company had paid for and learned that they had also paid about $150 a night for hotel rooms while in Kunming. I noted that was probably three times what the hotel ordinarily charges and that these same people probably had a deal with the hotel to pocketed the difference. The Northwest company wrote back and agreed, after looking up the normal rate at the hotel at which they stayed.

There you have it. The classic China scam to get a service company to go to China, making hundreds of dollars a night on overpriced hotel rooms and with the potential to make much more on things like cigarettes and remittance fees.

Over the years, we have been asked to perform basic due diligence for many American and European service companies before they go to China. In most instances, we have relatively rapidly become convinced that our client is in fact caught up in a scam, without our client having to go to China at all. We do this by first determining whether our client is dealing with a real company — most of the time they are not. There are all sorts of other checks as well that can and should be done before you leave. In the story above, the company got off with losing money — sometimes worse happens.

You have been warned. Again.

For more on this particular scam, check out Ancient Chinese Business Scam With A New Hollywood Twist. It’s Baaaack. and Ancient China Business Scam With A New Hollywood Twist.

  • Terry Newman

    The same thing happens at trade shows. Be Careful. We are based in China and so the damage was very limited, but they will do the same even when it entails you flying in from overseas for bogus meetings. In our case, several years ago now, someone called at our booth and dropped off a business card asking that we get back to him. I was not present at the time. After the trade show we followed up and arranged another meeting in Shanghai at a time when I was heading down to the airport. It was a bit tight, but there was plenty of time for what should have been a first face to face.

    I went to the designated address and met with the guy in charge, who introduced me to his boss. The meeting went a little too smoothly and they were a little too keen, but I could not see any particular problem at this stage. After a short meeting they informed me that a lunch had been arranged with the key people in the project and that it was expected that I would pay for this. I attempted to reschedule, because I had to be at the airport in an hour or so, but they assured me that the restaurant was very close by and I need not stay long. On that basis we headed off to the restaurant, which turned out to be half an hour away. I was driving my car and I had my interpreter with me, but their guy was in the car with us so we had no opportunity to discuss my concerns, because I didn’t know if how much English he might understand. At the restaurant there were already bottles of allegedly expensive baijiu on the table and I was also asked to buy cartons of expensive cigarettes for everyone at the dinner (about 10 people). This crowd looked like a bunch of losers dressed up for the occasion and I told my interpreter that this lunch WAS the business. I had a quick bite and told the organiser that I had to leave for the airport straight away. I did not accuse anyone of anything on the off chance that I was wrong about the whole thing, but as I left the same guy escorted me to the cashier to make sure I paid the bill and once again to pressure me to buy cigarettes. I said that I needed the cash I had to purchase a new air ticket (true) and that I would buy them cigarettes when they came down to my factory the following week as had been arranged at the meeting.

    I missed my plane and never heard from them again. The phone number was dead and the company didn’t come up in any internet searches. This was not a huge thing, but it was a waste of time and cost me about the equivalent of $800 with the new domestic ticket. These guys were pathetic lowlives and I was annoyed that I had not checked out their company name or website before I went for the meeting, but it was only a meeting and it was related to the trade show. There was nothing to alert me that it was a scam. So the lessen is that even the most innocent-seeming arrangement can be a scam, so it is best to look askance at every “opportunity” and at least do rudimentary checks.

    I have come across all sorts of scams in the last eight years and I am now pretty hard to catch out, but there is always some new angle. Keep your wits about you. Trust is the default position in the west, mistrust is the default position here and for good reason.