Interesting article about watch fraud in the Netherlands

[foxy1moo]

Hi All

Came across this article from a few years ago, so apologies if it’s been discussed before. It’s concerning fraud at one of the two main Rolex ADs in the Netherlands.

Interesting part is how they work with traders getting rid of excess stock that they are forced to buy, that also might explain one of the reasons for long waiting lists on popular models. No idea if it’s a common problem.

It’s below, google-translated from Dutch, so not perfect English.

Jewellers sell exclusive watches with high discounts to merchants with criminal contacts. Through this sale at the back door, the watches end up in large numbers in the underworld. This is shown by NRC research. The police confirm the state of affairs and see jewelers and watch dealers increasingly appear in criminal investigations. "We see that jewelers and traders are drawn into the environment and that they are facilitating criminals more broadly than just money laundering," says Wilbert Paulissen, head of the National Criminal Investigation Department. Jewelers have made themselves dependent on traders in recent years. They are required by famous and popular brands such as Rolex, Cartier and Audemars Piguet to purchase more and more watches each year than they can actually sell. If they do not meet the requirements, they can forget about their dealership and lose many customers. "Almost half of all watches in the market are from Rolex," says director Mark van Nieuwkerk from jewelery store Schaap en Citroen. Jewelers therefore often work with regular traders who buy the less wanted or somewhat older models at a discount of up to 30 percent. In return, traders want the scarce and highly sought-after models that customers in the store sometimes have to wait for years. Schaap en Citroen works with five or six of these types of traders.

[tyler1980]

why blame the store, blame the brand. Being sent more watches than they can sell and if they don't sell them then they lose their dealership.

Its not sustainable and they have to move product. The anger at what AD's do with their stock is the symptom, the problem is the brand.

No one cares when everything is available at discounts though, once a premium is involved then people get mad.

[Dyim]

Are they talking about grey dealers only? And money laundering on top of it?

[inadeje]

Hmmm so that’s where all the SS Rolex are, the crime underworld has them...:)

[bradyb]

Makes sense and likely happens all over the world.

[Vaxe]

It's true, just part of the dynamics of watch manufacturing. Still gotta make and sell the huge margin models where demand is little, but make less of the low margin items where demand far exceeds supply. Other luxury commodities have been doing it since inception.

[Sebastian5]

Originally Posted by Dyim

Are they talking about grey dealers only? And money laundering on top of it?

There is an ongoing investigation of Schaap Citroen (AD). They allegedly sold thru the backdoor with forged papers. On paper they exported the watches to other EU countries and thus excempt from sales tax/VAT. But in reality they were sold within the Netherlands. Trial probably starts this spring.


Then there's the case of Mustafa Y, a reseller who in 2018 was convicted of moneylaundering and fraud. Below a part of the article concerning this case.

Owner Benno Leeser of Gassan is one of the witnesses in the criminal investigation who praises him. Y. is a friend of the jeweller's head of cash management and buys watches in large quantities in order to sell them at a profit to his own customers, internationally.

In 2014, Leeser told NRC that nothing would change for him until Y. had been convicted. Jewelers Pijnenburg and Schaap Citroen did drop Y., it appears during the trial. This is one of the reasons why he moved to Dubai, where he still lives.

(Gassan is a large Dutch AD)

Dutch source (translated with DeepL): https://www.nrc.nl/nieuws/2018/02/09...-stuk-a1591606

Not sure if they're connected


But is doesn't surprise me one bit, lots of drugs money over here

A large majority of ecstasy taken in Europe and the US comes from labs in the south of the country, which are increasingly run by Moroccan gangs involved in the production of cannabis. Half of the €5.7bn a year of cocaine taken in Europe comes through the port of Rotterdam, according to Europol.

https://www.theguardian.com/world/20...n-dutch-police

[Fresh_1]

Originally Posted by inadeje

Hmmm so that’s where all the SS Rolex are, the crime underworld has them...:)

Too funny!

[HogwldFLTR]

I'm pretty certain money laundering doesn't cause watches to be retained by criminals. They can of course be resold and cash recouped.

[exador]

.

[CDNWatchNut]

hmm...might be a reason to avoid buying a watch that was sourced originally from one of those AD’s. It seems conceivable that if the serial numbers of these watches are known to the investigative authorities and that they are found to be associated with a crime, then they could be on a list to be confiscated if they ever surface at a RSC?

[Sebastian5]

I found a more extensive article (2015) from the reputable newspaper NRC

Long but interesting read, text is in Dutch but I translated it with DeepL. So it might contain some weird grammer.

Time is money

Watch trade Criminals wear the most expensive and newest watches. Where do these Rolexes come from? The answer is simple. Jewelers sell them in large numbers through the back door. It benefits all involved. But more and more often, the black market in watches appears in police investigations. "We see that jewellers are being drawn into the criminal environment.

It is about a quarter to nine in the morning of October 6, 2014, when a black BMW X5 is trapped by an arrest team in the Gooise Villadorp Huizen. The driver is a businessman who trades in exclusive watches all over the world. He is 36 years old and born in Laren. Justice suspects him of money laundering and for over a million euros seizes his white house in the village, a garage, cash and a number of other cars.

One of the cars that are seized is another BMW, a grey 330. But soon it turns out that it is not the watch dealer. The real owner picks up the car from the police that same week. He is head of cash management at Gassan, by far the largest jewellery store in the Netherlands.

The arrest is not an isolated case. During raids, the police increasingly see that criminals have exclusive watches in their homes. Why is that? The older models could still come from an auction. A heirloom perhaps. Or a robbery. But the newest and rarest models, and in these numbers? Only a system can be behind that.

Research by this newspaper shows that almost all major established jewellers facilitate the lucrative grey and sometimes black trade in watches. And that some are prepared to go far.

It is mid-March when the annual Baselworld watch fair opens in Basel, Switzerland. The already pricey hotels in the city charge double rates and are packed. Inside women parade in glitter dresses at the towering stands that the watch brands have made especially for the show: a white, futuristic dish by Patek Philippe, a business 'fort' by Rolex. Spots at eye level highlight the latest models: from a platinum Fabergé Lady Compliquée, in which a peacock hatches from an egg, to the Hublot Big Bang Broderie, with eleven diamonds and an embroidered dial. Prices on request.

One floor up, the conversations that really make up this fair take place. There the brands receive behind closed doors the jewellers who are allowed to sell their exclusive watches worldwide. In Basel - and earlier in the year at the Salon International de la Haute Horlogerie in Geneva - the collection is determined which in the course of the year worldwide and therefore also in the Netherlands in the shops.

"I'm here for the 42nd time," says jeweller Benno Leeser, owner of Gassan, a family business with several branches in Amsterdam, at Schiphol and at an airport in Singapore. In a dark blue suit he and his wife and daughter sit at a long table in one of the halls.

From his bag he gets a booklet of appointments this week. At 12 o'clock he is at Rolex. I am the customer, says Leeser. But they, the brands, are in charge. Since mergers in the watch industry - Cartier, IWC and Jaeger-LeCoultre, for example, are now owned by the Richemont company - their power has only increased. Leeser: "If I want to buy watches from a brand, they say I have to buy watches from another brand from the same company.

Enthusiastic he greets another Dutch jeweler. "If you walk into the brands, they have actually already decided what you come to buy", he agrees. The team of Schaap en Citroen arrives on Sunday.

Dutch jewellers have had an increasingly difficult time in recent years. Watch lovers can see exactly which models there are and what they cost elsewhere via the internet. And although fewer and fewer people buy the watches in shops, jewellers are forced by the big brands to buy more and more expensive watches every year.

Contracts
At the Basel fair, Rolex does not only decide how many of which Rolexes a jeweller buys for that year. Rolex also determines how much space Rolex gets in its store and where. And whether all those Rolexes can already be paid for? The prices that go up every year are non-negotiable. Of course the jeweller can say that he wants it different, but for him ten others.


The agreements are laid down in contracts. If a jeweller does not comply, he will not receive a bonus at the end of the year or his business will not be mentioned in a joint advertisement. In the end, he is no longer allowed to be a dealer. And the fewer major brands a jeweller sells, the fewer customers he sees. "Almost half of all watches on the market are Rolex watches," says director Mark van Nieuwkerk of Schaap en Citroen.

Of the exclusive models of a few tens of thousands of euros, a jeweller always gets less than he wants. Everyone wants them. These are watches of which only a limited number of copies are made per year. And then there are the even more exclusive limited editions of soon one and a half tons each. The manufacturer only favours these editions as a favour.

And the watches the jeweller had to take with him? At the end of the year he often hasn't sold that yet. Then the new stock market will be in sight again. And the bank will not finance a new collection if the old one has not shrunk.

Returning the remaining watches is impossible. How do jewellers get rid of their stock? Jewelers put things into perspective at first: the little we have left over goes into the shop at the end of the year with a little discount on sales.

But what did Gassan's grey BMW 330 do to the arrested watch dealer?

While an ignorant customer waits three years for an exclusive watch to be able to pay the full price in the shop, established jewellers sell watches in large numbers with high discounts through the back door to independent dealers. This is what watch dealers, valuers, former employees of jewellers and other involved parties tell us. They just don't like to say it out loud, because it harms the trade. Jewellers only say it about each other. Leeser says he has "hardly any stock". That he does business with only one trader. And that the sale is "very limited".

A watch trader tells about his good contacts with the managers of major jewellery stores. He calls them, but as often he receives calls. Either he receives an SMS from the manager, that new watches have been received and whether he has customers for them. The trader buys the watches that the jeweller would like to lose. But in return he wants that one wanted copy that the customer has been waiting for in the store for years. A trader shows e-mails with entire stock lists that a jeweller sent him - just choose.

Television personalities
Watch traders are mostly charming men of around forty years of age. Self-employed, who mainly do business in the Randstad conurbation and in North Brabant. To whom do they sell the watches again? To customers with money, some of whom appreciate anonymity. Television personalities, footballers, criminals.

The traders sometimes have companies outside the European Union, for example in Switzerland or Hong Kong. Just like milk powder, there is a shortage of exclusive watches in Asia.

In practice, the sale of watches through the back door takes place at the chic headquarters of the established jewellers. There the good customers are received with respect. Those involved say that jewellers depend on this trade. That the industry would otherwise collapse. On average, 70 percent of jewellers' turnover consists of watch sales, the rest comes from jewellery.

But sales to traders are also short-sighted. A customer is looking forward to a next time. Why buy a Rolex in the shop if you can buy it faster and cheaper at a trader or via the Internet? The jeweller undermines the sales in his own shops and becomes more and more dependent on the traders.

The upper and lower worlds are becoming interwoven. Watches originally attracted criminals. They are a status symbol. In these circuits, everyone can see from a distance what your Audemars Piguet Royal Oak is worth - and what you are worth.

In addition, watches are an easy black currency, the origin of which is difficult to trace. A customer who buys a watch in the shop receives a warranty certificate or certificate with his name and a date. Traders receive the certificates blank.

The fact that jewellers facilitate the black market is evident from numerous past and present cases. A number of large traders are now involved in criminal or tax investigations. According to sources, their customers include serious criminals.

Rally
The Gooise businessman who was trapped at the end of last year, in his own street, is Mustafa Y. One day he bought a number of watches at Gassan and that became more and more. "In 2008, when things went a bit less, he really helped us a lot", says jeweler Benno Leeser. Gassan sells to Y. according to his own words "for at most 750,000 euros per year" of Rolexes, at a considerable discount. He would get a 25 percent discount on it.

The ties between the jeweller and the watch dealer are close. The head of cash management of Gassan and Mustafa Y. are friends. They exchanged their cars just before the arrest, so that the Gassan man in Y.'s Porsche can participate in a rally for rare diseases that Gassan sponsors.

They often exchange cars. They come together, visit parties and a sex club in het Gooi ("to pick someone up and we drank a drink", Y. says in a reaction). They celebrate a holiday together in the Maldives ("I had already booked the hotel anyway", Y. says) and in Dubai. Y. also takes the head of cash management to a Formula 1 race in Singapore.

The police started monitoring the watch dealer following a request from the Belgian police who were working on a mega-investigation into cocaine transports. He had received money in custody from the Flemish Aquino family who organised the transports, the Belgians suspect. "There were also elements in the file showing that the payments for the drugs might have been made with watches", confirms a spokesman for the Federal Public Prosecutor's Office in Brussels. "These payments were made via Y.". A seven-year jail sentence has been demanded against him, the case will not be resumed until this autumn. Y. himself assumes that "nothing remains" of the case.

After a telephone call from Belgium, the police in the Netherlands suspect that the capital with which the businessman started his watch business is of dubious origin. In the provisional indictment he is suspected of money laundering, from 2004 to 2014. One and a half months after his arrest he is released pending the investigation.

Gassan owner Leeser insists that nothing changes for him, as long as his good client who once helped him out of trouble has not been convicted.

Mustafa Y. also does business with other jewellers. At Pijnenburg Jewelers in Eindhoven he gets up to 30 percent discount. "I don't want to respond to this", says owner Joost van der Heijden. The discounts of jewellers to traders can be so high because the jewellers earn a lot from it, a margin of about 35 percent. It is not clear whether jewellers always know with whom they do business. But it is a fact that they want to keep the high spending customers friendly anyway.

Waybills
Of the boxes of expensive watches that regularly go from Schiphol Airport to Hong Kong, some do not appear to weigh what they should. The Tax and Customs Administration discovers this in 2013 when it requested the waybills from FedEx. The shipment comes from Schaap en Citroen. The company has branches in eight Dutch cities and a head office in Diemen, near Amsterdam.

The Tax and Customs Administration has been interested in Schaap en Citroen for some time. Could it be that the boxes are empty? And that the watches don't leave the country at all? In that case, the jeweller would have wrongly not paid VAT and thus commit tax fraud.

Then also the intermediary of the transaction, an Amsterdam watch trader, comes into sight. Every year he buys more than one and a half million euros in watches from Schaap en Citroen. Sometimes he can take watches that he only pays later. He resells the watches to other traders. Schaap en Citroen director Mark van Nieuwkerk says the company works with five or six traders. He calls them 'Networkers' himself.

Black market
A year later, FIOD, the investigative service, invaded the trader's house in Amsterdam early in the morning. Later that day, FIOD took the administration of the head office of Schaap en Citroen. "The suspicion is that the jeweller's chain resells watches to the middleman. On paper they made it look as if the watches were resold to companies in other European countries," says a spokesman for the Public Prosecution Service, who does not want to mention the name of the company.

It then appears that the watches were also paid in cash, which the jeweller should have reported immediately, according to the judicial authorities: "The suspicion is that the jewellers chain deliberately did this too late. The watches were probably sold by the dealer on the black market.

Sources confirm that the criminal investigation concerns Schaap en Citroen, a manager at the company and the watch dealer, is in full swing. Witnesses are still being heard.

It is not the first time that Schaap en Citroen is in trouble. In 2010 the jeweller settled with the Public Prosecutor because it had not reported large payments from customers in cash more than once.

Schaap en Citroen commented: "The Public Prosecution investigates the sale of watches in which a Dutch middleman was involved. Schaap en Citroen has acted according to its internal procedures and is in good faith. The investigation has not yet been completed. Therefore, for the time being, no external announcements will be made in this respect.

Other jewellers would not always report cash payments either. A major criminal investigation into serious crime in the capital also reveals this. The now liquidated Amsterdam criminal Gwenette Martha had turned his eye to two Audemars Piguets, one of 52,135 euros and one of 17,550 euros. Pijnenburg Jewelers in Eindhoven does not report the cash payments of the two watches. Owner Van der Heijden: "The watches were sold before I became owner, so I can't say anything about them.

Everyone has butter on their heads," says a trader. The brands, the jewellers - everyone knows how it works. But while the brands spend millions on marketing, the right 'experience' and placing the watches in the shops, they allow the trade to take place by the back door. Turnover is turnover. He makes a comparison with branded clothing. Surely this sector also has outlet stores?

The police see it differently. In Amsterdam, expensive watches are not only used to launder money, but also to "protect criminal assets," says a spokesman. If the police want to confiscate watches, criminals "wave" "with shady consignment forms" that would show that the watches belong to another person.

The Amsterdam police encourage jewellers and traders to self regulate, for example by registering the serial numbers of watches.

The head of the Landelijke Recherche Wilbert Paulissen (National Investigation Department) increasingly sees watch sellers appear in investigations. "We see that jewellers and dealers are drawn into the environment and that they are going to facilitate criminals more broadly than just money laundering.

Source: https://www.nrc.nl/nieuws/2015/04/18...486047-a946631

[Johny]

A very interesting read.

[mattskybeat]

Thanks for sharing, it seems that drug dealing is a more honest trade

[joli160]

Originally Posted by Sebastian5

I found a more extensive article (2015) from the reputable newspaper NRC

I don't think the NRC qualifies as a reputable newspaper and anything written in it is always based on some higher moral ground and mostly prints utter rubbish. Fake news.

Are you really insinuating that Gassan has anything to do with dealing in drugs ?
I don't know your beef with Gassan but you cross a line here.

Gassan is a reputable jewellery store since 1945 where you can buy with full confidence.

[Chester01]

Originally Posted by inadeje

Hmmm so that’s where all the SS Rolex are, the crime underworld has them...:)

this is what I have been saying for a long time. Everyone keeps talking about excess demand and no supply. Plenty of supply on the gray and illegal markets apparently.

[Calatrava r]

I have always thought the overall watch market very soft but for a few hard to get models. This article seems to support that.

[77T]

Many EU dealers may have put a lot of thought into a solution to inventory mismatches. Creatively wholesaling (which bypasses VAT) to another entity/person leads to trouble in the long run, though.

I’m sure this frustrates Rolex distribution channel management, but their long-standing floorplanning of ADs - and doing so in the dark where the AD has no control over incoming inventory - inevitably leads the AD to measures that will preserve sales volume despite low local demand for some of the incoming models.


Sent from my iPhone using Tapatalk Pro

[J!m]

The validity/accuracy of the article not withstanding, I think the point is made.

Supporting the gray market may carry some baggage with it. This is the first time I’ve seen it spelled out like this, but I feel the overall Bardot I’ve is completely plausible.

Hey oem’s: increase supply of desired models, and drastically reduce supply of less desirable ones. This way you can flip the market over.

[Sebastian5]

Originally Posted by joli160

I don't think the NRC qualifies as a reputable newspaper and anything written in it is always based on some higher moral ground and mostly prints utter rubbish. Fake news.

Can you please point out the mistakes in that article

Are you really insinuating that Gassan has anything to do with dealing in drugs ?
I don't know your beef with Gassan but you cross a line here.

I'm not insinuating anything, I'm posting a newspaper article. How is that "beef"?

Gassan is a reputable jewellery store since 1945 where you can buy with full confidence.

Maybe you should read the article. No one is saying you shouldn't buy at Gassan.

In fact, I bought my own watch there as well, very pleasant experience

[joli160]

Sebastian, from your post 7 you suggest otherwise;

Not sure if they're connected
But is doesn't surprise me one bit, lots of drugs money over here

Imo it is not correct to write something like that.

Just my 2 cents.

[dtwer]

So the moral of the story is, don’t buy from the greys?

[05carbondrz]

Originally Posted by tyler1980

why blame the store, blame the brand. Being sent more watches than they can sell and if they don't sell them then they lose their dealership.

Its not sustainable and they have to move product. The anger at what AD's do with their stock is the symptom, the problem is the brand.

No one cares when everything is available at discounts though, once a premium is involved then people get mad.

Once again,Says the Guy who can get any Watch he wants.You seems to reply to EVERY stock thread with the same old song and dance.

[Sebastian5]

Originally Posted by joli160

Sebastian, from your post 7 you suggest otherwise;

Not sure if they're connected
But is doesn't surprise me one bit, lots of drugs money over here

Imo it is not correct to write something like that.

Just my 2 cents.

Even though these two lines you're quoting were a seperate paragrapgh. Fact is Mustafa Y, a big client of Gassan and reseller, just got convicted for money laundering.

That doesn't in any way mean Gassan is in the drugtrade, just that it has some sketchy clients.

Why do you think it's incorrect to point this out?

[crazymcmichael]

I readed this article some years ago.. Indeed blame the brand....
Besides this i do think that watches are very lucrative tradingwise for criminals… Especially Rolexes ap and pp, and most likely the steel variants even more cause they are very easy tradeable and in the Netherlands you can buy cash anything under 15000 euros

[tyler1980]

Originally Posted by 05carbondrz

Once again,Says the Guy who can get any Watch he wants.You seems to reply to EVERY stock thread with the same old song and dance.

counter balance to the whining in EVERY thread . Been waiting on an OF daytona for over a year. Not making a conspiracy about it though

If i get it great, if not. no big deal. Not my AD's fault that there are more people waiting than deliveries. I could source it elsewhere as can everyone else if they wanted.

[emtee]

Originally Posted by 05carbondrz

Once again,Says the Guy who can get any Watch he wants.You seems to reply to EVERY stock thread with the same old song and dance.

I don’t really understand your beef. These stores only get X amount of watches and can only serve Y amount of people. And those are just the hot watches. They also get Z amount of watches that they struggle to sell. What do they do with those if they want to stay in business? See above...

[tyler1980]

Originally Posted by emtee

I don’t really understand your beef. These stores only get X amount of watches and can only serve Y amount of people. And those are just the hot watches. They also get Z amount of watches that they struggle to sell. What do they do with those if they want to stay in business? See above...

he has an issue that im not part of the AD lynch mob.

TBH my views on AD's have changed because of reading these threads. I would not want to deal with a lot of the people here at work every day. Its just nasty a lot of the time.

I also found a good AD after dealing with awful ones, so i sympathize with the good ones getting lumped in with the bad. Somone says one thing and its just pages of piling on whenever AD's are bought up.

No one recognizes the fault of discount shopping for all these years contributing to the secondary market. Go to a high volume secondary dealer to get the best discount. They want to blame AD's and absolve themselves of any responsibility of the situation being where it is now. These dealers are the only consistent customers the AD has had for years and now everyone is scrambling back for the chance to pay retail, but cant get a watch.... its not their fault, its your fault especially if you are buying multiple watches a year which a lot are. Its just not been from an AD.

[Macnavara]

Originally Posted by foxy1moo

Hi All

Came across this article from a few years ago, so apologies if it’s been discussed before. It’s concerning fraud at one of the two main Rolex ADs in the Netherlands.

Interesting part is how they work with traders getting rid of excess stock that they are forced to buy, that also might explain one of the reasons for long waiting lists on popular models. No idea if it’s a common problem.

It’s below, google-translated from Dutch, so not perfect English.

Jewellers sell exclusive watches with high discounts to merchants with criminal contacts. Through this sale at the back door, the watches end up in large numbers in the underworld. This is shown by NRC research. The police confirm the state of affairs and see jewelers and watch dealers increasingly appear in criminal investigations. "We see that jewelers and traders are drawn into the environment and that they are facilitating criminals more broadly than just money laundering," says Wilbert Paulissen, head of the National Criminal Investigation Department. Jewelers have made themselves dependent on traders in recent years. They are required by famous and popular brands such as Rolex, Cartier and Audemars Piguet to purchase more and more watches each year than they can actually sell. If they do not meet the requirements, they can forget about their dealership and lose many customers. "Almost half of all watches in the market are from Rolex," says director Mark van Nieuwkerk from jewelery store Schaap en Citroen. Jewelers therefore often work with regular traders who buy the less wanted or somewhat older models at a discount of up to 30 percent. In return, traders want the scarce and highly sought-after models that customers in the store sometimes have to wait for years. Schaap en Citroen works with five or six of these types of traders.

I’m not sure if I am missing the point but whats criminal about that:thinking

[rambo99]

luxury watches connected with money laundering, oh no!