The company approached us for an investment of $3M.
We had the meeting and a few days later they sent me a term sheet and proof of funds. After reviewing and signing the term sheet. Everything looked straightforward, except they were asking for proof of Investment Liability Insurance before they would transfer any funds. At first I thought this was just another name for D&O and/or E&O coverage, so I sent them my proof of coverage. They responded that the coverage wasn't sufficient that I explicitly needed ILI. The problem is my lawyer or any insurance brokers had never heard of ILI. I thought maybe it was just a semantic issue, so I ask for clarification from the investor and they recommended a broker that could provide the coverage. This was a pretty big red flag and I basically stopped communicating with them.<br />
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According to others this is a common scam, but I wanted to share further details just to show how elaborate of a scam this is.<br />
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The firm that the scammer claimed to represent is a legitimate firm registered in a European country that has existed for many years. And the details on the website for the firm matched all the details found in the company's registration information. However, upon further inspection the registration information for the domain indicated that the domain was just registered a few weeks ago. It would appear the real company has no website and the scammers used this to their advantage to setup a website posing as the firm. Since the firm had no other website, a search would only bring up a single website for the firm making it seem legitimate at first glance. The contact information, address, and email addresses all matched the companies real registration information. Since the website was only a few weeks old, the real company would most likely have no idea that their identify was being used yet.<br />
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The Proof of Funds that was sent was from a bank that does exist and the domain from which the email was sent matched the domain of the bank or so it would seem. Further inspection found that the domain for the bank did not actually match the domain of the real bank listed on dnb[removed by editor]. Further inspection found that the website for the domain that the email came from was a fake site setup to look like a real website for the bank.<br />
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Anyway, I just wanted to share this as something to be on the lookout for.<br />
