Shenzhen Jinfengying Industry Co., Ltd: China Not Exempt from the "SCAM Game"

Did you receive a contract from this company? If you did, please read our story BEFORE you deal any further with them!

Our company recently received a contract in the mail from a company in China called Shenzhen Jinfengying Industry Co., Ltd. (who I will refer to as SJI from now on). It was a supply agreement, asking us to furnish parts to them over the next two years which would total approximately $12 million dollars. Fortunately, our company has a strict policy that all contracts must be reviewed by the Legal department before being signed, and so it found its way to my desk.

I gave it to one of our attorneys, who soon came back to me and asked if I had seen one of the paragraphs in the contract, which appeared to her to indicate that the contract was a scam. As a paralegal, part of my job is doing research, and she asked me if I would look into this company, as well as the "notary fee" requirements in China. The paragraph said:

"Notarization of the contract. To protect the benefit of both sides, the contract need to get notarial deed from Notarial Department after signing the contract. The cost of notarization will be 1 of 1000 of the total cost (12257USD), each side will pay half of it (6128.5USD)."

My research turned up nothing on this company in particular (which is one reason why I decided to write this article!). However, I did find several articles about scams which discussed scenarios very similar to ours. I went back to the attorney with my findings, and she informed our Sales group that it was her opinion that it was a scam.

Unfortunately, one of the main reasons that scams succeed is that human beings are just naturally greedy. Because of the size of the potential contract, our Sales group decided that they wanted us to revise the contract, taking out the notary paragraph, and see what happened. In addition, it was decided that one of our salespeople would make a trip to China to meet with this company and sign the contract. SJI seemed okay with our revisions, and agreed to meet with our salesperson when he arrived in China.

Our salesperson met with this company at a restaurant for dinner, and they discussed the contract. Finally, at one point, one of the SJI representatives asked if he could get the $6,000 notary fee from our salesguy. "No," he replied, explaining once again that we had deleted the requirement from the contract. "Well, what about $3,000?" the person asked? "We can run your credit card right here at the restaurant and transfer our money to you at the same time." "No," our guy once again replied, and left. After he returned to his hotel, he received a phone call from one of the representatives from SJI, informing him that several members of the company had "just been arrested, and we will have to void the contract".

End of story. It was a SCAM!! Now, our company is not a small, naïve mom-and-pop shop. We had sales over $300 million last year!! But this just goes to show you why scams succeed, how far some people will go to make a scam work, and why so many people find themselves victims of one type of scam or another every day.

As the old saying goes, and it is SO TRUE: "If it sounds too good to be true, it probably is!!"