Ukrainian company scammed for $63,000 by Romanian website developer

Back in 2019, a big chain of clothing boutiques, Ultrashop, ordered a design of an online store from the company Starsoft Europe. There was a payment of more than ₴1.7 million (approx. $63,000), but there were no replies from the other party. The related cases are in the courts now. AIN.UA presents the situation in detail.

Ultrashop is a chain of brand boutiques that together with mono-brand boutiques of Levi’s, Guess, Baldinini, Karl Lagerfeld, Boss, and Hugo constitute Ultra Group based in Odesa. On the 21st of May 2019, one of the group’s legal entities, EOST Inc., concluded an agreement with the Romania-based company Starsoft Europe to create a web store branded as Ultrashop. The court documents do not mention the name of the Israeli citizen residing in Germany who was concluding the agreement from Starsoft’s side.

According to the Unified State Register of Legal Entities of Ukraine, Odesa-based Starsoft, LLC belongs to Martin Shein. Additionally, according to the register of pre-court decisions, he is a suspect in the other case, and he should be held in custody during the court process:

According to the files of the case, the implementation of the online store was split into stages, and deliverables should have been presented to the client. Moreover, the company was supposed to deliver the finished online store by November 20, 2019. The representative of Starsoft received payment from EOST Inc. for the development of the store from May to August 2019, with a total amount of ₴1,745,939 (confirmed by the representative’s receipts).

According to the investigation materials, the second party had no intent to fulfill its part of the agreed obligations and was imitating the online store’s coding work. In May 2019, Starsoft’s CEO gave his order to the UI/UX designer, SEO specialists, and a project manager to develop a website concept, its ad policies, and a project task list. Nonetheless, two technical leads were not receiving any orders to write program code for the store during the period from May to August 2019.

Meanwhile, Starsoft’s representatives were showing the client some pieces of work done from the online store, including the interface’s graphic elements, ad policies, project tasks, claiming that the work on the store was going and it would be delivered in time. EOST Inc. was transferring money as follows: ₴436,323 in May 2019, ₴435,315 in June 2019, and ₴426,649 and ₴420,352 in August.

Meanwhile, Starsoft’s management had left Ukraine and was not communicating since then. The developers who were supposed to work on the project were not receiving salaries, and all had quit by October 2019. Starsoft’s management was not paying the rent since September 2019. In September 2019, the representatives of EOST Inc. had checked the progress of work, and there was less than 5% of completion. Whereas according to the agreement, there should have been 75% of the project done. As of November 30, 2019, the end date stated in the Agreement, the online store was still not delivered to the client.

The total amount of material losses of EOST company was ₴1,745,939.

In August 2020, investigators from the Investigations Unit of the Primorsky Police Department drew up a report regarding suspected fraud by the management of Starsoft. Several members of the company were put on the international wanted list, and as of March 2021, it was established that (presumably) Martin Shein was in Bogota, Colombia. He was detained for extradition to Ukraine.

The case is being investigated: the last court hearing took place on August 27, 2021. No verdict has been issued yet.