Dead in the Water: A True Story of Hijacking, Murder, and a Global Maritime Conspiracy
By Matthew Campbell and Kit Chellel

The crime:

In July 2011 the oil tanker Brillante Virtuoso was apparently hijacked by a gang of pirates in the Gulf of Aden. The pirates didn’t hold the ship or the crew for ransom but only set it on fire. It later turned out at trial that the owner had staged the pirate attack and scuttled the ship in order to claim the insurance. Along the way, a British investigator living in Aden was killed by a car bomb, which was probably a hit related to his early questioning of the ship owner’s shady business practices.

The book:

This is the sort of true crime book I really enjoy because in addition to telling an interesting story it also provides a lot of background that’s new to me. In their introduction, the authors set the scene by talking about how marine trade has gradually become more invisible:

as ever-larger vessels required ever-larger quays, and robotic cranes replaced longshoremen’s brawn, the ports moved away to obscure locales like Felixstowe and Port Elizabeth [today Gqeberha]. Eventually the sailors also receded from view – some made obsolete by automation, the rest pushed out by cheaper, less demanding workers from developing countries. Even more than power lines or sewer pipes, ships slipped into the background of modern life, not so much taken for granted as barely noticed at all. As consumers, we’ve never before had access to such a bounty of goods, and we’ve never had to think so little about how they come into our possession.

Assisting this slip into the unnoticed background of daily life has been another peculiarity of the shipping trade: the use of layers of shell companies concealing the ownership of individual vessels and the “flags of convenience” that allow vessels to avoid pesky labour, safety, and environmental regulations. As a result, if a ship sinks or the cargo and crew are lost it can be a Herculean task just sorting out who is responsible or liable. From its beginning

the entire modern shipping industry had been structured to interpose layer upon corporate layer between the men who profited from owning ships and those who labored on them. When something went wrong, if there was a fatal accident or the crew ran out of food, it was easy for shipowners to claim ignorance and diffuse responsibility.

As a result, cases of maritime insurance fraud are fascinating mixtures of high-seas skullduggery and white-collar shenanigans. The attack on the Brillante Virtuoso was just a crude and stupid affair, albeit quite grim for the poor Philippine crew. The insurance plot, on the other hand, was more sophisticated: designed to take advantage of the fact that the law doesn’t do a great job dealing with such problems. In fact, as with most white-collar crime the law is designed precisely to avoid having to deal with these matters. And the insurance industry in particular would rather just pay to make problems go away since losses can just get passed on to consumers anyway. That’s how insurance works. The house never loses. In fact, white-collar criminals don’t lose either. “The lesson: maritime fraud is profitable, and even if you are unlucky enough to get caught, you’re unlikely to be prosecuted.”

The bitter sting in the tail of this story is that the owner of the Brillante actually came out ahead by about $10 million. The “moral flexibility” of the insurance market would even see him still being able to buy insurance from Lloyd’s after the legal findings against him. It’s all just business. As for moral hazard, I guess if the sums are large enough that doesn’t matter anymore. This led me to a deeper reflection on not just morality but the whole question of corporate culture having its incentives not just a bit but entirely wrong. This is what led to the subprime mortgage crisis back in 2008, and I’m afraid it’s pervasive in all sectors of the economy now. We’re all in the money and enjoying cheap goods until the music stops and we’re left wondering “Who did this?’

The book itself is not quite a page-turner, but it’s pretty darn good. The focus is on the efforts of two investigators, Richard Veale and Michael Conner, and their battles not only against the Greek ship owner and his allies but the insurance company that hired them. Talk about a snake pit.

Noted in passing:

There’s a great interaction described between some of the insurers and Veale where the insurers are pushing back against the strength of the case.

Everything they’d learned so far was “circumstantial,” one of the attendees said. Incensed, Veale interrupted him.

“Throughout this I’ve heard you all talk about circumstantial evidence,” Veale said. “Do you actually know what that means?”

“That there’s no smoking gun,” the man replied.

“A smoking gun is the best example of circumstantial evidence,” Veale said, his voice rising with frustration. It could only be otherwise if someone had witnessed the weapon being fired. “Circumstantial evidence isn’t weaker evidence,” he continued. “DNA and fingerprints are circumstantial evidence.” None were proof, on their own, that a crime had been committed or by whom. They were building blocks, to be combined into the foundation of a persuasive case, one that Veale was confident would succeed if the insurers were willing to make it.

The exchange addresses the very common misconception that circumstantial is somehow less reliable and weaker than direct evidence. In fact, circumstantial evidence is often far stronger than direct evidence, as eyewitnesses can be very unreliable while physical evidence (such as DNA and fingerprints) is something you can take to the bank.

Takeaways:

“The shipping industry has the unique attribute of being utterly integrated with the world economy while existing apart from it, benefiting from its infrastructure while ignoring many of its rules. It’s sometimes said that the seas are lawless, and that’s true: far from shore, on a decrepit trawler or a juddering ore carrier, there are certainly no police, and often no consequences. But the most audacious crimes can occur where the maritime world intersects with the more orderly terrestrial one – enabled by the complexities of twenty-first-century finance and, perhaps most of all, the collective indifference of a global populace that wants what it wants, wants it now, and doesn’t want to know the human cost.”

True Crime Files