B2B Payments

Smaller Firms Targeted For Big Hauls By Payments Fraudsters

Size matters when it comes to payments fraud, it seems.  Recent stories show local companies targeted for big payouts, done through fake invoices, and of course, unauthorized use of corporate cards.

Small firms, big fraud. Amid the crime that roils the payments world, smaller firms are finding themselves a bit more exposed to scams than might have been seen three years ago.

As reported by TwinCities.com, the Better Business Bureau (BBB) and Federal Trade Commission surveyed 1,200 small firms across the nation. Of that tally, 67 percent said they felt there was “greater risk” of being scammed than previously. The most prevalent methodology was for scammers to pose as someone who the business “knew or trusted,” as the site reported.

Separately, and in a case involving payment card fraud, Navajo Times reported that Director Jesse Delmar of the Division of Public Safety is “on his way to being sanctioned with 20 percent of his salary” in the wake of a June order from a committee. The action follows a review by auditors that found some sanctions were not followed. Those sanctions were tied to travel and operating charges that were inconsistent with procurement rules.

In one instance, payment card charges that were not consistent with procedures totaled to more than $29,000. Travel expenses were not approved, the audits found, prior to trips being taken. In other cases, holders bought two meals on a single charge.

Crime Pays – Eventually, So Do The Bad Guys

In one case that showed how crime does not pay (and, in fact, can cost all parties dearly in Connecticut), a woman agreed to reimbursement to the tune of $1 million. That comes as redress as Candace Rispoli pleaded guilty to $800,000 in wire fraud, tied to embezzlement in a scheme that stretched back to 2012. Rispoli had utilized PayPal and Venmo accounts. She was an employee at Lodestone Management Consultants, which eventually became Infosys Consulting. She had a company American Express card that had been set up to pay for travel expenses, yet she used that card to pay for personal expenses for herself and her boyfriend, and transferred more than $800,000 to those PayPal and Venmo accounts.

In Toledo, it was reported that Kristine Michelle Daniel who had served as a former day care worker  had been charged with misusing corporate funds. She faces five counts of first degree theft and two counts of money laundering. Where she once served as executive director for a Kids Corner center, she allegedly charged cell phone accessories and other items, including cigarettes and an iPad, to the corporate credit cards. In some cases, she sold those goods online. The alleged grand total was more than $278,000. Of that, roughly $55,500 came from improper credit card purchases, and some of the other fraud tallied had been tied to undeposited cash collections, which had been payments from parents for child care.

Want another way and means of fraud?

Think of livestock. In Canada (Saskatechewan to be specific), a former manager of a livestock brokerage was found guilty of bilking $1 million from three companies that, in turn, owned a feed cattle exchange. Gregor Gmerek was fired nearly six years ago for steering payments to his own accounts via false invoices and unauthorized checks. These were known as “off-the-record payments” and were deposited into fake bank accounts.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.