Security & Fraud

The $2B Cross-Border CEO Email Scam

Think twice before answering that email from the boss.

Financial Times reported Wednesday (Feb. 24) that a scam has taken wing, wherein criminals use email to impersonate the communications sent by chief executives in a ruse that has cost companies worldwide as much as $2 billion over the past two years, according to information from the FBI. The FBI has said it has seen a boost in the “business email crime” category, which is simple but effective enough to have snared 12,000 victims across the planet.

The scam has a criminal enlist the persona of the boss, who then directs an employee to wire money to an overseas bank account, and the money has a habit of disappearing rather fast.

FT reported that the average transaction has been around $120,000, but at least some of the firms duped have been known to send as much as $90 million, according to US investigators.

And the pace of fraud has been growing, too, with more than $800 million lost in the past six months, outpacing the $1.2 billion that was lost between Oct. 2013 and Aug. 2015. The wrongdoing has been traced to 108 countries.

In an interview with FT, James Barnacle, chief of the FBI’s money laundering unit, said: Criminals don’t have borders, and this is a global problem. We’re working with our criminal investigation resources, our cyber resources, our international operations divisions — which is all our legal attachés overseas — and we’re working with foreign partners around the world to try to tackle this crime problem.”

The report stated that most of the accounts in which the money lands have been based in Asia or Africa, where gaining local assistance in investigation has been tricky.

More recently, reported FT, the CEO email fraud has been targeting real estate firms to grab funds held in accounts tied to home sales.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.