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Conman takes Nato contractors for $50m



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Conman takes Nato contractors for $50m
FROM MARTIN FLETCHER, EUROPEAN CORRESPONDENT


A PONYTAILED American conman posing as a senior Nato official has duped 90
companies across the world out of at least $50 million (31 million) worth
of cutting-edge technology in one of the most audacious scams of recent
years.
The man fooled the companies - several of them household names - by dangling
the tantalising prospect of sharing in a top-secret $120 billion Nato
contract if they sent him state-of-the-art equipment for testing and agreed
to say not a word about the project. He has vanished without trace, leaving
behind him scores of companies so embarrassed by their gullibility that they
do not know whether to sue or quietly write off their losses.

A British high-tech firm unwittingly played a key role in the fraud. The man
recruited Envisage Distribution of Reading, Berkshire, to act as a
procurement agent with the promise of handsome management fees when Nato
began actually purchasing equipment. Envisage brought nearly 30 companies,
including Sony, into the fictitious project, and Electronic Data Systems,
the giant American company founded by Ross Perot, another 60.

Envisage acted in good faith and was "outraged" by what had happened, its
lawyer, Keith Oliver, said yesterday. Envisage alone had lost at least
500,000, and was considering legal action against Nato because it believed
Nato was warned of the scam in 1997 and did nothing.

A Nato spokesman said: "This appears to be a regrettable case of illegal
activity but it is clearly a judicial matter and not one that directly
involves Nato."

The scam began in 1994 when the black man arrived in the Belgian town of
Rekem, 70 miles east of Nato's headquarters, and married a local bank
manager named Christel Peters, according to the Wall Street Journal. He
adopted the guise of Lieutenant-Colonel Lamar Reed, a US Air Force officer
attached to Nato, and set up two companies, AMS Laboratories and Applied
Technologies, with a woman he introduced as his cousin.

They sent out letters signed by fictitious Nato generals explaining that
Nato was looking for a "secure interoperable communication origin
identification and verification system". Suppliers were told the equipment
they provided would be "tested to destruction", and therefore unreturnable,
and were obliged to sign confidentiality forms forbidding them from
discussing the project.

"Colonel Reed" communicated with his victims mostly by fax and telephone. On
the rare occasions that he appeared in person he wore a crisp military
uniform and tucked his ponytail beneath his military cap. He added touches
of authenticity by, for example, periodically suspending the operation
during the Bosnian and Kosovo conflicts.

Mr Oliver said there were "strong and compelling reasons" for believing this
was a genuine Nato project, including the detailed technical knowledge the
man displayed and documentation which "could only have been Nato-sourced".
On one occasion the man even returned some "battle-scarred" computer
equipment saying it had been damaged in Kosovo.

Incredibly, the ruse worked. The suppliers sent tons of their most advanced
audio and visual products at their own cost to "Colonel Reed's" two front
companies in Belgium. His neighbours in Rekem said they were amazed by the
volume of boxes and packages delivered to his flat every day.

The conman's luck finally ran out early last year when Sony grew suspicious
and sent a private detective to Rekem. The police raided his flat and found
it stuffed with electronic equipment, much of it not even unpacked. They
found three $25,000 flat-screen monitors and several digital video cameras
stored in a pigeon coop at his Belgian in-laws' home. Subsequent searches
found another five sea containers and eight lorryloads of equipment, but not
the elusive "Colonel Reed".

Investigators told the Journal they believe that "Colonel Reed" adopted the
identity of a Lamar Reed, who is a US Army cook in California, and that his
"cousin" was in fact his first wife.

The real mystery is what he intended to do with his mountains of
duplicitously obtained equipment. It appears he had not sold a single item.


http://www.the-times.co.uk/news/pages/tim/2000/03/30/timfgneur01004.html



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