Business Partner Fraud

Even the seemingly best partnerships are not immune to one-sided breaches of trust — in private life as well as in business. Beyond risks such as industrial espionage, theft, burglary and billing fraud, entrepreneurs repeatedly face the situation in which they are exploited by so-called “good friends” or apparently reputable business partners who prefer to line their own pockets. The detectives of Kurtz Investigations Dortmund investigate on behalf of aggrieved entrepreneurs to establish fraud in a manner admissible in court or to locate absconding perpetrators at home and abroad: +49 231 8401 0065.

Below is a case study from Dortmund in which the fraud was, fortunately, comparatively small — although the victims, given their income situation, suffered significant losses:

Fraud via a Usage Agreement

Hugo T. (all names changed) ran a small retail shop on Dortmund’s eastern outskirts from the year 2000. With his specialities he had made a name for himself locally and built up a large regular clientele. Friends, relatives and acquaintances also shopped with him, including Nils R., who at that time worked for a telecom company (a fact Hugo did not know) and was an acquaintance of Hugo’s. Nils said he planned to set up on his own in the same sector and suggested they might run a shop together. Under Nils’s plan, Hugo would keep his shop while Nils opened a second outlet and they would operate an online shop jointly. Hugo was not opposed to the idea but pointed out that he had no proper internet presence, let alone an online shop. Nils allayed these concerns by promising to arrange a website that could be used as an online shop. Hugo — a naturally good-natured man — agreed.

By a handshake the deal was sealed and Nils immediately “took care” of a website — of course registered and hosted via the telephone provider that employed him. He told his supposed business partner that it would be cheaper if the rental contract for the website were signed for ten years. Hugo, who knew little about the internet and did not yet suspect he would soon need the assistance of the corporate detectives of Kurtz, agreed. Nils set up a site that consisted only of a homepage with two photos and a few stock phrases. His employer, however, paid him a handsome commission (the sold package was well above market price).

First Excitement, Then Dismay

Hugo was delighted at how quickly Nils progressed with the website and looked forward to the joint online shop and the expected extra revenue. He told other local business owners about the planned extension of his advertising reach and recommended Nils to those without an internet presence. Four of those he approached then asked Nils to create websites for them too. The sales representative was naturally delighted and persuaded these entrepreneurs to enter into ten-year contracts as well.

Over the following weeks Nils created the respective sites, but he took his time installing an online shop for Hugo and the other businesses. The clients grew uneasy and suspected that Nils had been stringing them along to earn a substantial commission. Some months later Nils informed Hugo that he intended to start up a speciality business in the United States. After that, neither Hugo nor the other entrepreneurs ever heard from him again; he ceased to respond to enquiries. The only memory of Nils was an expensive ten-year contract for internet presences that the entrepreneurs, lacking the necessary knowledge, could not operate themselves and therefore had to commission a service provider to run, incurring further costs.

Flight Abroad | Debtor Tracing by Our Detectives in the United States

Several months later, Hugo and two other affected business owners contacted the Kurtz Investigations Dortmundeconomic detectives. Nils claimed to be in the USA, but his exact location was unknown, preventing direct accountability. The telecommunications provider refused contract cancellation, citing elapsed withdrawal periods.

Using long-standing international contacts, our Dortmund detectives coordinated with partner investigators in the United States. They discovered that Nils had purchased a home in Naples, Florida, living comfortably as an early retiree. With assets traceable, the detectives forwarded the information to their clients, who pursued their claims. Due to bureaucratic hurdles and Nils’ persistent refusal to acknowledge the fraud, it took over two years before the Dortmund business owners recovered their payments.

Note

To protect the discretion and personal rights of clients and subjects, all names and locations in this case study have been altered beyond recognition.