Bogus Car Dealers Drive Off With U.S.$5 Million

Jan 20th, 2010 | By | Category: Media Release

Nairobi — Japanese and Tanzanian investigators are working to unravel an alleged scheme operated by bogus online car traders in Japan that has led to East African motor vehicle importers losing over $5 million.

Investigators want to establish how much of the stolen funds can be recovered, saying that due to the nature of the long-running scheme, victims may recover only a small fraction of their losses.

Regional importers are now wary of online shopping, mainly for used motor vehicles from Japan, after it has emerged that many car dealers advertising themselves online are bogus.

Several online auto marts have apparently used the weak legal regime in Japan to swindle customers of their money by lying that they are winding up their firms due to the economic crisis.

The EastAfrican has been informed that a number of aggrieved clients have registered complains with the Tanzanian embassy in Japan over bogus car dealers who swindled them out of money.

Unsuspecting clients, mainly from Tanzania, are believed to have lost thousands of dollars as they were lured into buying cars from Japan by the low prices offered by some online sellers.

Fearing that the trend could disrupt the lucrative used car business, the government of Japan has launched extensive investigations into the allegations.

“The investigations will involve all nationals involved the used car trade, no matter whether the fraudulent traders are actually Japanese, Tanzanians or third-country citizens in Japan,” said Yukinori Seki, commercial attaché at the Japanese embassy in Dar es Salaam

Director of Criminal Investigations Robert Manumba told The EastAfrican that Tanzania would for the time being leave the matter to the Japan government for further investigation.

“So long as our colleagues in Japan are working on the matter, let’s wait for the outcome,” said Mr Manumba.

Two weeks ago, the Tanzanian embassy in Japan warned Tanzanian online shoppers against buying cars via the Internet-based companies, saying some were phantom companies, whose owners disappear as soon as they receive the money.

The acting ambassador of Tanzania in Japan Elibariki Beleko told The EastAfrican by e-mail that many Tanzanians who had seen online ordering as the cheaper route to buying cars had lost huge amounts of cash.

According to Mr Beleko, some of these companies are actually owned by Tanzanians living in Japan, selling used motorcycles and bicycles as well as cars.

The Tanzanian diplomat said many companies in Japan — both genuine and fake — use and unsuspecting buyers are not able to tell whom to avoid.

Bogus companies offer attractive prices.

A limited time to confirm purchase is then given to an inquirer, with the rider that the selected item will be sold to another person if no response is received by a a given time.

Many customers fall for this and send the money through telegraphic transfer into given bank accounts and addresses — and that is the last they hear of the dealers. In other cases, a supplier will not supply the cars as agreed on the grounds that the company is bankrupt.

According to the Tanzanian official in Tokyo: “Due to some weaknesses in the legal regime in Japan, the embassy lacks the necessary capacity to force them to pay up or ship the cars.”

According to the embassy, among the companies about which the embassy has received complaints from Tanzanians is the Global Trading Co Ltd, which now says it is bankrupt.

Others are Car Zone Japan, which is alleged to have taken a total of $91,550 from nine people without delivering cars; 41 Expo Inc. Ltd, Progress Ltd, and The Trading Club — which owes six clients’ motor vehicles.

Several Japanese firms such as Autorec and Renew Car, which trade in used cars, have opened offices in Dar es Salaam as away of getting closer to clients and reduce fraud.

Autorec managing director Masao Kuwabara told The EastAfrican that unscrupulous dealers in some cases appear to have cars, but make deals with several customers, whereas they will ship the car to the customer who pays first.

For the rest of the customers, they will try to find similar vehicles but of less value and different specs and ship them.

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  1. Can someone please help me. A certain Japanese dealer Asad Ali Shah of Dolphin International Co Ltd owes me $34,000 that i had sent him to purchase cars. He has refused to ship the cars or refund me my money back. He tells me that he is using my money for business in Japan and will reward me handsomely, its now been two years.

    I have reported this to the Japanese embassy here in Kenya but they told me me that they can do nothing. Another shocking thing is that, when i reported this matter to the embassy they told me that they have previous records of this dealer doing this to other people before. This left me wondering why they have not stopped him yet.

    If anyone knows where i can report this to recover my money let me know kindly. I have tried the following without any success, Japanese Embassy Kenya, Jetro-both in Kenya and Japan, Japan Arbitrators Association. This dealer has even insulted me, calling me a stupid african and even telling me that he would file for bankruptcy if i report him.

    Can the Japanese government realise that people are suffering and come up with ways of sorting this mess now.

    To other people, be very careful and don’t use this dealer. Funny thing is that he has not gone into hiding clearly showing that he knows what he is doing.


  2. You send him how. I know its TT but has this fellow ever been in Kenya?


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