14 DAY TRIAL // In the past year, businesses across the world have recorded huge losses as a result of multiple types of fraud known under the name of Business Email Compromise (BEC), the scammers making close to $215 / €191 million.
The report comes from a public service announcement issued by the Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center.
Most of the victims are US-based
According to the report, most of the victims are from the US, who also incurred the largest portion of the financial losses, but businesses in 45 other countries across the globe were also defrauded.
IC3 says that between October 10, 2013, and December 1, 2014, a total of 2,126 victims fell prey to a BEC scam of some kind. 1,198 of the victims are from the United States, while 928 are from other countries.
However, the situation is direr for businesses in the US as they are targeted more often, and in the analyzed period, they recorded a total of $180 / €160 million in financial losses.
Shamming businesses
At a larger scale, the BEC swindle targets big companies that either purchase fictitious goods or are fooled into delivering their products to the criminals after agreeing to a delayed payment request.
This is achieved by impersonating a long-standing partner of the targeted business via phone, email or fax communication. The message received by the victim asks them to deliver goods or money to a different location or bank account than usual.
Since there is an established relationship between the parties, the victim agrees to the request, the crooks ending up receiving the goods/funds. The scheme is complex as it also involves fake documents, financial or otherwise.
A variation is to take control of the email account of a high-level executive and use it to send a wire transfer request to the person in charge of this operation.
Alternatively, an employee’s email is hacked into and used to deliver invoice payment requests to business partners identified from the list of contacts.
Most money ended up in bank accounts in Asia
In other email scams (work from home, home rental, romance, lottery), victims are oftentimes tricked into accepting a generous job offer only to be used as money mules.
They receive to their personal bank account money obtained illegally from the fraudster and are asked to deliver some of it via wire transfer to a bank account owned by the criminal. The rest should be retained as part of the wages for the fake job or contract.
IC3 says that the victims are sometimes tricked into opening business accounts for fake companies, all of them in their own name. Thus, when the original fraud that generated the initial funds is discovered, everything points to the victim.
Based on the investigation of the IC3, it appears that most of these scammers are located in China, as fraudulent wire transfer payments were received from the victims to banks in China and Hong Kong.