Aluminum wheel shipments targeted in fraud scheme

The Washington-based Institute of Scrap Recycling Industries (ISRI) has reported nearly a dozen companies have been victims of scrap purchasing schemes by a fraudulent entity that does not follow through with payment.

The association says the combined value of the shipped material, which often consists of scrap aluminum wheels, “is in excess of $3 million.”

Throughout the first half of 2020, a fraud ring has operated representing itself as a large auto parts manufacturer. According to ISRI, “The fraud involves an individual placing an order under and claiming to represent ‘Linamar Mills River,’ an entity that does not exist.”

Adds the association, “As part of the scheme, individuals place orders via email by posing as representatives of a phony division of Linamar Corp. Linamar is an auto supplier headquartered in Ontario, that sells a large amount of aluminum scrap in the U.S. The fraudster purports to represent ‘Linamar Mills River,’ (not an actual division of Linamar) and sends emails from an address that ends with @linamarmillsriver.com.”

Orders placed by the fraud ring typically consist of scrap aluminum wheels that carry a value in the $100,000 to $600,000 range, says ISRI. Orders have included billing and delivery information using an address of GF Linamar, which is an actual Linamar joint venture company located in North Carolina. “It is our understanding that much of the scrap is redirected to Pennsylvania (where Linamar does not have operations) at some point before delivery,” adds the association.

In part because of the recognizable Linamar name, “It appears that victimized recyclers do not conduct customer due diligence to check the accuracy of the banking/payment information supplied. The material is shipped but the payments do not arrive,” states ISRI.

The association states that “the appropriate U.S. authorities have been informed and are investigating.”