“With the kind of risk you would face, I didn’t want to be a part of it. If any one single thing went wrong, you would be out of your investment. The rewards were just not worth the risk.”
Littleton would hear nothing of it. He was screaming into the phone, “I have the offer for a container of Marlboro in Limassol for $470 a case. With the window for moving the cargo into the United States closing, I can easily sell this to one of my customers at $570. That is close to a hundred grand in profits for us to split! How can you dismiss it?”
Bartel responded as calmly as he could under the circumstances, “John, you cannot look at this that way. Today your customer says he can pay $570 but by the time this cargo reaches Miami, it will be another 40 days. In 40 days the market conditions can be drastically different. I have heard of many dealers who have a substantial amount of Marlboro already on the water and reaching our shores soon. I get the feeling prices may actually start to get depressed with the kinds of volume of shipment that is expected to land in this country soon. The end players in USA who can and will deal with the imported Marlboro are only a handful. There seems to be a substantial amount of stock that is coming in. I highly suspect that we could sell this for any more than $520 or thereabouts. While that still is a good profit, I am not convinced the risk of buying in Limassol is worth it. By the way, I received this same offer to me at $450, a full $20 a case lower than the offer you have.”
Littleton reacted with, “So we buy at the price it was offered to you and we can make a better profit! Why are we not doing this deal?”
Bartel shook his head and said, “We cannot do it without Patrice inspecting the cargo, John. And Patrice is on vacation for two more weeks. Until he returns I cannot do any cigarette deals as there is no one like Patrice that I trust to inspect cigarettes.”
Littleton was adamant. He felt that he was now an experienced hand at this business. The prospect of letting go of a potentially very profitable trade was not palatable to Littleton. He said vehemently, “I want to do the trade, Ron. You have to make it happen.”
Bartel said, “I wouldn’t touch this with a ten-foot pole! Without Patrice we cannot do this, John. Let it go.” After arguing for a few more minutes they ended the conversation without coming to an agreement.
Chapter 5: The Limassol Deal
The next morning John Littleton was calling Ron Bartel yet again. Littleton sounded excited as he said, “Ron, I spoke to my source for this Marlboro in Cyprus. He says the seller will accept a payment via escrow at Tabaknie. He also says the cargo is in Agiamukis International Bonded warehouse in Limassol. Agiamukis is well-known to Tabaknie as many dealers store cigarettes in Agiamukis in Limassol.”
Bartel knew all about this deal as he was direct with the broker for the owner of the cargo. He also knew Agiamukis in Limassol. Furthermore, there had been deals in his past he had concluded where the cargo was at Agiamukis and the funds were at Tabkanie’s escrow in the Netherands. And the escrow payment was released to the seller in Limassol after the cargo arrived to Tabaknie’s warehouse in the Netherlands. Basically, the Cypriot owner of the cigarettes shipped the cargo to Netherlands with the assurance that payment was fully in escrow in the Netherlands and would be released to him when the cargo reached the Netherlands. The sea-transit from Limassol, Cyprus, to Rotterdam, the Netherlands, was only 14 days.
In Bartel’s mind, the fact that Tabaknie in the Netherlands knew Agiamukis warehouse in Cyprus didn’t mean that the cigarettes were authentic. As a result, he still did not like this deal.
Littleton wouldn’t stop his arguments. He said he would get Jan van der Meer at Tabaknie on the phone for a conference call with Bartel to discuss the deal further and Littleton set-up the conference call.
As the conference call between Littleton, Bartel and Jan van der Meer began, Littleton took control of the conversation. He asked Jan van der Meer, “Jan you know Agiamukis Bonded warehouse in Limassol, don’t you?”
“Yes. I have known them for years as someone who stores and ships cigarettes for their clients,” replied van der Meer.
Littleton continued, “Would you say the cargo stored at Agiamukis was legitimate? I have been offered some Marlboro cigarettes for sale that are currently stored at Agiamukis.”
Jan said quietly, “I know them to store large amounts of cigarettes. They know how to safely and securely store cigarettes for their clients. Some of their clients also ship and store cigarettes with us at Tabaknie. I have not had any unpleasant experience with Agiamukis. Having said that, Tabaknie and myself, we cannot take any responsibility for cigarettes that are at their warehouse. I am not there and without Patrice inspecting the cargo there, I cannot say anything one way or the other.”
Littleton continued, “I understand that Bartel here has advised you who owns the cargo we are talking about. Do you know this person to be reliable?”
Van der Meer responded, “I don’t know who owns the cargo. Ron Bartel has not informed me who owns the cargo and even if he did inform me, I have no way of knowing that to be true. I suppose the person who knows who owns the cargo would be Agiamukis but I doubt they will disclose the owner’s identity.”
Ron Bartel interjected, “John, I have not informed Tabaknie about this deal. I have not spoken to Jan or anyone else at Tabaknie about this deal. As I told you that we should pass on this one, I really have not pursued this deal yet and I don’t wish to pursue it moving forward.”
Littleton asked van der Meer, “But if I placed the funds in escrow with Tabaknie, can Tabaknie release the payment after the cargo has been shipped and you have received the original shipping documents?”
Van der Meer said, “John, if you send us in writing how you want your funds released from escrow, we will follow your instructions. However, I have stated before, we cannot be responsible for cargo that is in Limassol when we are operating in the Netherlands.”
Bartel added, “I think what John wanted to know was that you can hold funds in escrow at Tabaknie until you at Tabaknie received the original shipping documents from Agiamukis. Once the cargo is shipped from Limassol destined for Miami, Agiamukis can collect the shipping document from the steamship liner and courier them to you in the Netherlands. Then when you receive the documents, you can release the payment from escrow to the seller. If Littleton here sends you instructions to this effect, you can follow these instructions, correct?”
Jan said that was not an issue but stated again that Tabaknie cannot be responsible for the trade. After covering some other minor points they ended the call.
The next day Littleton called Bartel and asked him to conclude the deal for the Marlboro that was at Agiamukis. He had decided he didn’t want to wait for Patrice’s return from his vacation. That would an additional two weeks or so. During that period, this Marlboro stock might get sold to someone else. Littleton didn’t want to chance it. Bartel kept objecting to the deal and until after some time he finally gave in saying, “John, this is your money and you do as you see fit but I honestly recommend you not do this deal.”
Within minutes of that phone conversation Bartel sat down at his desk and wrote an email to Littleton which stated something to the effect that Bartel wanted to wait for Patrice to return from his vacation. That way Patrice van der Meer could be paid to go and inspect and check the cargo in Limassol for authenticity and freshness. Bartel clearly stated that no cigarette shipment should ever be undertaken without Patrice’s inspection. Bartel further stated that all prior Marlboro shipments that Silver International and Sherwood Holdings were involved with had been inspected by Patrice and now was not the time to change that policy. And went on to say that this was Littleton’s money and he, Bartel, couldn’t exert any control on how Littleton spent it.
A couple of days later, Littleton called Bartel and asked for a proforma invoice for the Marlboro in Limassol. Bartel called his source and asked for a proforma stating to him that, “I have a customer willing to take this cargo. However, payment will be
placed in advance at Tabaknie’s escrow. We will need Agiamukis to send a loading report and loading images. Once the container is shipped out of Limassol, the original shipping documents will have to be delivered to Tabaknie. When Tabaknie receives the shipping documents, Tabaknie will release the payment to you. We will pay the freight and handling costs to Agiamukis for their services. Can you do this?”
Bartel’s source for the Marlboro that was in Limassol was a broker based in Stamford, Connecticut, named Theo Stevenson. Bartel had known Theo for almost ten years and the two had made several deals over the years, all of them successfully. Theo answered with a New England accent and said, “Ron, I have to call my supplier and see if he can live with your proposal. I will call you back. With the time difference I may not be able to give you an answer today. If I don’t get back to you today, I will answer you tomorrow.” Theo hung up the phone. Theo was in his fifties and had been in the cigarette business for a couple of decades. Theo also brokered classic and collectible cars. He dealt with a lot of high-end clients in automobiles. He operated under the all-encompassing company name of Overseas Trading. Overseas Trading had connections all over the world and Theo dealt with all kinds of characters, both clean and unclean. Theo had become successful by keeping all parties in a deal happy. He knew that any deal was possible if there was something in it for each participant.
Theo called Bartel back and informed him that the Limassol Marlboro deal was on. The seller of the goods had agreed to the terms that Bartel had asked for. So Theo asked Bartel to whom to make the proforma invoice out to. Proforma invoice is a piece of paper on the seller’s letterhead that lists the buyer’s name, the product being bought, the product description, price, payment terms and any other details that are involved in the deal. Normally, the entire deal is put down on just one sheet of paper that shows the agreed upon terms and conditions of a deal.
“Make the proforma to Silver International, my company. Please list the terms on the proforma we discussed and agreed to. Also we need to copy Tabaknie on all communications between you and me so Jan van der Meer knows the terms we have agreed to.”
Overseas Trading’s proforma arrived as an attachment in an email to Bartel. Bartel opened the proforma and everything he and Theo and agreed to was plainly stated. Bartel went through the proforma and checked off everything mentally. Then he proceed to make his own proforma on Silver International’s letterhead naming Sherwood Holdings as the buyer. This was customary as Bartel did not want to disclose his source to Sherwood Holdings and to Littleton. As much as they cooperated together, Bartel never introduced any of his clients to Littleton and similarly Littleton never disclosed any of his buyers to Bartel.
In this business a client list is everything. Who the client is and what they buy, what they sell, to which market they can distribute, what prices they can pay or what prices they can supply a product at, etc. are key pieces of information that is the bread and butter of any international trading business. This client list is closely held asset and never ever disclosed by a trading company to anyone. In fact, Bartel shredded all documents at the end of each day that would otherwise go into the trash. He knew brokers who would go through other brokers’ trash to dig out the source or a buyer of various products.
Bartel’s proforma to Sherwood was on Silver International’s letterhead and the body of the proforma page looked like this:
Sold to:
Sherwood Holdings LLC
1248 Executive Boulevard
Norfolk, VA 23320
1 x 40’fcl x 960 cs Marlboro @ $450 per case
50 cartons per case
Total 48,000 cartons for total sale price $432,000
FOB Limassol
“Freight Collect”
Payment in escrow with Tabanie’s Account with Banque Artesia Breda
SWIFT: ARTENL2A Account:0633888709
Release payment against delivery of original Bill of Lading to Tabaknie N.V.
Additional: Agiamukis Bonded in Limassol to handle shipment and provide loading images and inspection report at loading.
It was a pretty straight forward standard proforma. Bartel sent this to Littleton via email and sent a copy of the email and the proforma to Tabaknie. Littleton made the transfer of $432,000 to Tabaknie’s escrow account in the Netherlands. Littleton emailed Jan van der Meer and copied Bartel an email confirming the transfer and attaching Silver International’s proforma.
The shipment left Agiamukis’ warehouse in a 40’fcl container. Agiamukis took images of the container loading and sent their inspection report indicating they loaded 960 cases of Marlboro, gave the container number and the seal number of the container. A container is sealed once loaded with the steamship liner’s seal. This report was sent to Tabaknie. Tabaknie sent the report to Theo Stevenson and sent a copy separately to both Bartel and Littleton. Upon review of the inspection report and the images, Littleton sent an email to Tabaknie, with a copy to Bartel, stating, “Release payment once you receive the original Bill of Lading.”
Bartel called Littleton immediately and said, “John, if you see the inspection report Agiamukis, he does not state anything about the production date or other details that Patrice would have been able to do. As you know, Agiamukis does not know how to decipher the codes on the cigarette packs. That is the problem of not using Patrice.”
Littleton brushed the concern aside with, “The images look good and Agiamukis stores and ships cigarettes all the time. I wouldn’t be so paranoid, Ron. Relax.”
Bartel couldn’t sleep well that night. It was the first time he was involved in a cigarette shipment that was not inspected by Patrice. And he felt uncomfortable and unsure. It was a very unsettling feeling for him.
Chapter 6: Limassol Cargo Arrives in Miami
This Limassol container of Marlboro arrived in Miami 40 days later and as usual Roberto Montoya unloaded the cargo into his free zone warehouse, Miami International Logistics Company. It was now late September of 2000. Just three more months and the door for Marlboro entry into USA from overseas would be closed. With shipping time, there were barely 4-6 weeks left to make and ship to Miami any Marlboro stocks available overseas. All the players in this business were anxiously trying to close as many deals as possible as quickly as possible.
Bartel’s buyers in Miami were already fully committed and financially they were not in a position to pay for the latest cargo that arrived from Limassol, Cyprus. Bartel had informed Littleton about this a couple weeks before the container of Marlboro reached Miami. As a result, Littleton had already lined up one his buyers for the cigarettes.
It was September 26, 2000. Littleton’s buyer was Stefan Vanhoudt, a Belgian by birth but now an American citizen. Stefan entered Montoya’s warehouse in Miami and inspected the cigarettes. He picked out 3 packets randomly and asked Roberto Montoya if he could take the three packs and get them analyzed before making payment. Montoya immediately called Littleton and informed him that Stefan Vanhoudt wanted to pull out 3 packs and get them analyzed before he could make the payment. Littleton didn’t object to it.
A week later, Bartel received a call from Littleton. Littleton was livid. “What the hell is going on, Ron? My buyer sent 3 sample packs from that last shipment of Marlboro from Limassol to Patrice van der Meer in the Netherlands for analysis. I have a copy of Patrice’s report here that I received from my customer. It says that the Marlboro is most likely a counterfeit. Just what kind of people are your sources? This is not acceptable!”
Ron Bartel’s nightmare had started. He knew it in his gut that no shipment of cigarettes should ever have been done without Patrice’s inspection. It was unpalatable to Bartel that Patrice could have gone and inspected the cargo in Limassol had Bartel had his way. And with Littleton insisting on shipping it without Patrice’s inspection, Bartel had foregone the opportunity to stop the deal in its tracks in Limassol. Had Patrice been hired to inspect the cargo before shipment from Limassol, he would have issued a detailed report indicati
ng these were counterfeit cigarettes. And at that point, Bartel and Littleton could have just walked away from the deal.
The same Patrice van der Meer that Bartel would have hired, now looks at three sample packs from that cargo and reports the product as counterfeit. Bartel sat down with his head in his hands. This was going to be bad. He knew from experience that any cigarettes that get identified as counterfeit would get confiscated by the government and the people involved faced long term jail sentences and huge fines. Bartel’s hands were shaking as he was furious and terrified at the same time.
It sounded to him like somewhere far away he heard Littleton’s voice over the phone saying “Now what solution do you have for this crisis! Roberto Montoya tells me that I should ship it out of the country immediately. I don’t want to take a loss on this shipment, Ron. I need you to contact your source and ask him to take the goods back and return my money!”
Bartel had to gather himself and his mind started racing. If the goods get confiscated, both Bartel and Littleton may be looking at serious consequences. He had to find a way out of this jam. He realized that Roberto Montoya’s suggestion to get the goods shipped out of the country right away was the only logical solution. But ship it to where? Now that Patrice had found this to be counterfeit, the cigarettes could not be shipped to Tabaknie in the Netherlands as Jan van der Meer would refuse to allow it to enter his warehouse. Bartel had to move it to one of the other warehouses in Rotterdam. About contacting the seller and asking him to do a refund, well that was out of question. This was not a dress one bought at Target that did not fit and had to be returned for a refund or a replacement. This was an international shipment of 48,000 cartons of fake Marlboro. The seller obviously knew the product was counterfeit and made a killer profit on the deal. There is no way in hell the money was being refunded. But Bartel was going to talk to Theo Stevenson, the seller’s broker about this nonetheless.
God Bless The Person Who Sues My Client - A True Story of Greed and Vengeance Page 4
