Investigating crime in the maritime and cargo insurance world is the remit of a unique team based in the United Kingdom
Signum Services Ltd is unique in the maritime insurance world. Part of the UK P&I Club, it is the only inhouse body in any of the 13 P&I clubs worldwide that investigates crimes connected with shipping and freight transport.
Set up in 1953, the company has always been staffed by former senior detectives from Scotland Yard. Over the years, its remit has included crimes and suspected crimes against the person on the high seas, drug smuggling and people smuggling, as well as crimes involving cargo or container theft or fraud in and around ports and in the landside supply chain.
Recently a Club member’s ship was detained and the crew of 14 placed under arrest by the Venezuelan authorities following a major drugs find on board. Signum was called in as a matter of urgency, and the investigator was able to identify the guilty party and expose a major drugs ring. The other crew members were exonerated and the vessel was released, saving the member potentially millions in demurrage.
Generally, requests for assistance come from one of the Club’s claims executives, but they can come direct from the member. All services are provided freeof-charge to the Club’s members, and other clubs frequently call on its services on a fee-paying basis.
Filling a void
Michael Carroll, who runs the unit together with David Thompson, explained that national police forces are hardly ever in a position to investigate crime on the high seas, as ‘port states’ have no jurisdiction and ‘flag states’ are often flags of convenience.
More generally, police forces hardly ever investigate commercial crimes, for lack of resources. Cargo theft goes largely unpunished, and it is costing insurers and, ultimately, shippers and society at large, a fortune.
Carroll cites a recent case in the UK where the police did not even attend the scene of the crime – theft of an entire shipment of high-value goods from a trailer in a motorway service station truck park. A cut was made in the curtainsider at night to check on the load and, having ascertained the contents were worth stealing, the thieves cut part of the curtain away to gain access, and helped themselves.
The driver claimed to be “asleep” in his cab and “didn’t hear anything”, which seems unlikely as noise and vibrations must have increased as the thieves reached the bulkhead. Some drivers allege that they were gassed in their cabs.
According to the Royal College of Anaesthetists, there is no gas that criminals can pass through the cab heating pipe in order to knock out the driver. Even if there were, how would they know what a ‘safe’ dose was? Given that the thieves are unlikely to be anaesthetists, somebody, somewhere would have been killed by now.
The issue is whether the driver is in on the job. Usually, the answer is no, but, if he intervenes, he is likely to get hurt.
Post-911, the ISPS code has tightened security in ports and terminals, and cargo theft is more difficult within the port or terminal boundaries, but it still happens. Signum was recently called in to investigate thefts from containers hipped from Japan to India. It was able to determine that the thefts were taking place inside the container terminal in a port in India, even though it has IPSI status.
The investigator found that the goods, mostly flat screen TVs, were being smuggled out by hiding them on the protection bars underneath the main frame of the chassis. As a result, seven men were apprehended in the act of committing a theft, and they admitted to many others.
There is an ongoing case involving theft from containers in a European port. The CY is fenced, well-lit at night, and has CCTV. Unfortunately, because of trade union concerns about “invasion of privacy”, the cameras point the other way, towards a local housing estate.
Signum is UK Customs’ official testing agency for container seals, and is an expert on seal tampering. Container tampering is high on the list of crimes it investigates. Some sealed containers reach their destination in an apparently secure condition, but when opened are found to be short-loaded, even though the seal is intact and has not been interfered with in any way.
There is no need for thieves to try to take the doors off by removing the hinges, which, in practice, would be very difficult in any case. Carroll and Thompson explained that thieves open the door without removing or tampering with the seal, by hammering out the rivet that retains the locking handle in the handle hub attached to the locking bar. Afterwards, a new rivet is glued to the door and the locking bar put back by hammering in a new bolt.
Recently the team solved a major fraud with links to organised crime in the Philippines, involving a shipment from Manila of 12 containers allegedly loaded with copper millberry wire worth US$2M. On outturn in Florida, the containers were found to contain bags of sand, although the seals were intact. This usually means one thing - the cargo as listed on the BL was never shipped.
The purchaser of the wire, an American businessman, had travelled to Manila to check out the copper before committing to buy it. He was wined and dined by the ‘vendors’, put up at a luxury hotel and taken to the warehouse to see the wire being verified and weighed by a certified agency of his choice, loaded into the container, which he then saw locked, sealed with a high-security barrier bolt seal and trucked ‘to the port’.
Following interviews with shipping line staff and port officials in Manila, the Signum investigator found out that the trucks entered the port gate 48 hours after they left the stuffing warehouse, which was just down the road, and that there was a discrepancy with the weights. He conducted further enquiries in the Manila suburbs, which entailed surveillance of scrap yards and warehouses, often at personal risk, where he saw copper being removed from the containers that were then filled with sandbags.
He showed that the trucks were diverted immediately prior to entering the port gates and taken to another location where the doors were opened, as described above, and the cargo substituted. The same copper had been taken back to the first warehouse time and time again for the loading inspection by the next buyer, and a repeat cycle of the scam.
As a result of personal surveillance and CCTV images from the hotel, Signum was able to identify the criminals, and it also showed, from vehicle licence plates in the vicinity of the crime, links to corrupt police officials. As a result of the investigation, the Club was able to defend the claim.
This is just one of many high value copper fraud cases successfully investigated by Signum in recent years. In every case, it proved that no copper was actually shipped in the containers, and Club members were able to avoid paying out on claims.
The modus operandi in Manila was very similar to an earlier case in Tanzania, involving a consignment of copper cathode sheets worth US$12M, purchased by a North American business. The investigation team sent out to
Dar-es-Salaam was able to prove that the containers were actually loaded with drums containing stones. The criminals were identified and arrested by the local police, and their next planned scam, which would have cost the innocent buyer US$18M, was prevented.
In another case, a grain buyer in India put in a claim against eight shipping lines when 500 x 20ft containers shipped from Russia were found to be practically empty when the containers were opened in his depot.
Holes had been drilled into the floor, and “sawdust” coverings of grain remained inside. Common sense indicates that this is not the most efficient way to steal grain, since it would take too long and most of it would stay put.
However, Signum was able to prove that the holes were drilled from the inside of the container, not from the outside. So, apart from the smattering of grain in an attempt to fool investigators, no grain was ever loaded.
By the time Signum is called in to investigate, the cargo is long gone, but the team solve 90% of the cases they handle by attending the scene of the crime, using their experience and forensic skills, and carrying out classic detective work.
Signum always produces a detailed, confidential report for the member, and it works closely with the Club’s Loss Prevention Department so that, where appropriate, general guidance can be issued to members.