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Case Study: Vehicle Remarketing Fraud

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Thursday 4th May, 2017 | Author: Alexander Gardner [member (F1737)] | Filed under: Case studies

“It’s probably nothing, but…”

Whilst having a routine chat with a longstanding client (Head of Fraud for an internationally known name), it was mentioned that they had noticed an increase in costs from one newer supplier when “off-fleeting” vehicles from their operations and having them prepared for remarketing. Although this is not the area we normally assist them with, the client enquired if I would mind “having a quick look into it?” to see if there was anything shady going on. This particular client operates well in excess of 35,000 vehicles in the UK and these are rotated on a regular cycle so the budget for the remarketing, although significant, is not bottomless and is monitored and this was now on his (and the Finance Director’s) radar.

“You can’t beat the Numbers!”

A very quick paper sift (those who know me can attest to my dislike of paperwork) through the client’s records did indeed show cause for concern with one of their supplier garages costing significantly more on each remarketing batch of vehicles sent to them, compared to the other supplier sites receiving a similar number of vehicles.

What was more evident, when you drilled down into the figures was that it was only happening with the more prestige vehicles sent there. Whilst the client’s vehicle condition sheets completed by their transport managers and delivery drivers only showed the sort of wear and tear one would expect i.e. stone chips on the bonnet, the odd minor dent on bumpers etc., all of which the garages would polish out / repair ready for the vehicles to be sent to auction / secondary market; the invoices being submitted by this particular garage showed a different picture. Mostly the invoices for repairs from this centre included new fairings, replacement alloys, brake discs and tyres etc. remember, only on the prestige vehicles.

“Never Assume”

They did!

The client looking at me with a knowing smile said “they are clearly selling on parts for expensive vehicles”. This was a reasonable prima facie assessment and the client started to tell me about some elaborate plan he had hatched with another supplier and a garage who were going to mark parts with SmartWater / etchings and then set up a “sting” to try and buy them from the garage. He was ever so excited but I was not going to allow him to spend a fortune on such an operation. I pointed out that if the garage were selling parts on it would not be to anyone just “walking in off the street” and that he could be spending a lot of money on no results.

If I had learned anything from my previous Military career it was to never assume anything and to study all available intelligence. One of the things I noticed from the vehicle condition sheets was that the mileages were different from drop off to receipt at Auction; some by only 10 or so miles. The client told me he wasn’t bothered and said that was allowable for road tests but, as I pointed out, some were different by 50 or even 100 miles. “Did any of the vehicles have trackers on them?” I asked. The client checked and although not all of the vehicles were tracked, a couple of them did have telematics units fitted. I asked the client to retrieve the data for them and email it over to me.

When I got back to our office and studied the data from the telematics I noted that the cars were being driven well in excess of 100 miles per hour on several occasions and that rough GPS data was placing them near old airfields around the South and East of England. Basic internet research showed that there had been “track days” where members of the public can turn up and drive as fast as they wish around a track set up on the runway and perimeter tracks. On several of the race dates the telematics showed our vehicles as in that area and driving very fast.

I prepared a brief assessment and action plan for the client, stating my belief the vehicles were being used in races or track days at the old airfields. The client agreed and authorised my company to conduct surveillance on the garage in question when the next batch of 10 vehicles were going in. This was 3 days later and mostly comprised of “standard” vehicles but also included a shiny 1year old Jaguar F Type R.

The vehicles were scheduled to be delivered at around 1900hrs and we knew from the pattern shown by our research that the target garage would be closing shortly after this time. The vehicles were observed and documented being received and secured for the evening and then all staff were noted leaving. It was decided to stand down for the evening and plot up for early doors the following morning.

“Standby, Standby”

Bright eyed and bushy tailed the following morning, we arrived on plot.

The trigger vehicle had an excellent spot and it was about an hour before the premises were due to be opened. My colleagues and I in the follow vehicles were parked up slightly away from the area. So, as the team leader, I set about with the second most important task in any surveillance job and went off to get some coffees and obligatory bacon rolls for the team.

Whilst standing in the queue of a local café I thought I was imagining things when I heard my colleague in the trigger vehicle transmit in very urgent tones to “Standby, Standby” The coffee was within touching distance and the rolls looked so good but, alas, it was clear that I needed to return asap.

I returned (minus coffee, sorry team) and listened as the trigger advised us that 3 unknown males had got into the vehicle and it was “off, off” towards my unit. Sure enough shortly after it came past us, 3 up. We let a cover vehicle in front, then joined the traffic and began the follow.

I am sure many readers have experienced the “serene” calm of a mobile follow in London so needless to say it was probably best I wasn’t wired with the extra caffeine from the missed coffees!

“The mists clear!”

2 hours later. Yes, 2 hours (and just over 90 miles) later it all became clear what was happening. We arrived at an old airfield which was hosting a “Track day”. The occupants of the vehicle were witnessed entering into the event and for want of a better word “ragging” the vehicle around the track lots of times.

High quality imagery was obtained from a standoff position; at this point it is probably apposite to thank Peter Jenkins from ISS, as I feel had it not been for him drilling into me several times on a previous training course about the importance of shutter speeds versus aperture versus maintaining focus on a target moving towards you, then I fear the imagery obtained would have been passable, but nowhere near as useful as it later turned out to be. As can be seen from the low res sample below (for the camera geeks f9, 1/250, ISO 400, 200mm) although taken from a standoff of over 150 metres away, facial identification was not going to be an issue!

Rather than risk compromise we elected not to follow them home but instead managed to obtain a list of participants from the event which helpfully included our vehicle and the names of the drivers. Quick desk based research back at the office revealed that 2 of them were in fact the Directors of the Limited Company operating the garage.

“Belts and Braces”

To be sure that it was not an employee using their bosses’ names, we attended the garage 2 days later with one of our own vehicles and asked about cost to have some scratches and chips polished out. During this attendance we witnessed 2 of the 3 males we had seen at the track day working in the garage and as we were wearing covert “button” cameras documented good facial id shots which matched the images of the males driving the vehicle. We were even able to match the moles on their faces. Once they introduced themselves and we got their names on the quotes we made our excuses and left.

We then waited till the invoice for that vehicle was submitted to the client and lo and behold it had needed 4 new tyres, 1 alloy refurbished, front brake pads and discs, and various repairs to damage to the side skirts and front bumper fairing in total just under £4k.

“Please can you do one of your interviews?” was the next call from the client, “with pleasure” was our reply. The supplier, when confronted, initially prevaricated, but when shown the evidence gathered and advised of our client’s willingness to go to open Court with the evidence very quickly accepted they had been caught out. He signed a statement saying what had happened and agreed to work with the client in agreeing which previous invoices were to be refunded. Needless to say they have also lost the contract for ongoing work. The client unfortunately, as is often the cases, did not wish to prosecute, just recoup their losses and move on. I do wish more would prosecute especially in some of the exaggerated personal injury claims we have worked, however they are the masters and we have to respect their decisions.

We were very satisfied to achieve a great result for a long-standing client, all as a result of a chance conversation over a coffee. The client was over the moon and the work keeps coming!

Article submitted by Full Member F1737 Alexander Gardner of ARIC. See further info here: