Toys 2 Discover Loses Thousands in Email Scam

Yonesen Schwartz, owner of Toys 2 Discover in Boro Park, in front of his store.
Yonesen Schwartz, owner of Toys 2 Discover in Boro Park, in front of his store.

When Yonesen Schwartz, owner of Toys 2 Discover in Boro Park, recently processed an order of toys from a factory in China, everything seemed as usual except for one thing: the sender stated that his banking information had changed.

Schwartz had been dealing with this company for a long time, and didn’t think anything of it.

He wound up losing $216,000.

He’s found out since that many  thousands who deal with China and other countries have been scammed in this way, including many people in our community, but they tend to keep quiet about it.

“One businessman told me he lost $800,000 — $800,000! — in a transaction to India,” Schwartz said. “He didn’t report it to anyone. When this happens, they feel ashamed, they feel like they’ve been fooled. But we are victims — we have nothing to be ashamed of. This has to be known about, and prevented.”

The hackers were very shrewd. First, they were able to divert the legitimate email into Schwartz’s spam folder. They then sent copies of the invoices from their email, which they created to be identical to the legitimate sender with the exception of a hard-to-notice change in one letter, such as switching an “m” to an “n.”

Although the company never got the payment, Schwartz received the shipment because the “forwarder” — the agent in China — agreed to release the shipment if Schwartz sent him a copy of the wired payment.

After receiving the shipment, Schwartz was about to send another payment for another shipment but didn’t — because of a defective screw.

“I opened one of the packages to assemble the toy for display,” he recounted. “When I tried to put it together, I noticed that one of the screws was too short. I opened a few more packages, and found the same problem.”

His store manager used his own email — which hadn’t been hacked — to ask the company to send 500 correct screws. “They said, ‘What do you mean? Why do you have the shipment? You never paid us!’” Schwartz recalled.

Schwartz has since paid for the shipments, which he said carry a retail value of about a half million dollars. “I’ll never see the money I lost. I just hope that other businessmen will avoid this trap.”

He said he contacted various enforcement agencies, but “they were of no help. They basically hung up on me.”

A spokeswoman for one of the agencies, speaking off the record, suggested that Schwartz contact Brooklyn District Attorney General Charles Hynes’s office.

The DA’s office told Hamodia that Schwartz — and anyone else similarly victimized — should contact the DA Action Center at 718-250-2340. A flesh-and-blood “screener” is available from 9 a.m. to 5 p.m., Monday through Friday.

Schwartz said it was fortunate that his manager had a separate email account to communicate with the company, and that the Chinese forwarder had accepted the wire document; otherwise he would have sent even more money to the scammers. Schwartz was “100 percent certain” that Hashem had a hand in preventing this further loss.

A Brooklyn businessman also dealing with China recounted a similar experience. “I was emailing a company I had dealt with a few times before,” said the man, who operates a lighting business based in Manhattan and Boro Park. “I knew they had two emails, which looked fine on the invoice.”

What he didn’t notice until after he had already sent $20,000 for a shipment of light bulbs, was that the last single digit in the email address had been changed from a”2” to a “3.”

It turned out that his $20,000 made a circuitous trip from China to South Africa, and finally to an unidentified location in Kenya. “I’ll never see that money again,” he said.

Asked whether he contacted any law-enforcement agencies, he said, ”No one in the U.S. or China can help you.”

“It was the first — and now last — time this will ever happen to me,” he said.

“From now on,” he said, he will carefully check all clients’ contact information before wiring money bank-to-bank, since  “that way someone has to walk into a bank and show their I.D. before collecting any sent money,” he cautioned.