
Robert A. Marsico
Partner
201-896-7165 rmarsico@sh-law.comFirm Insights
Author: Robert A. Marsico
Date: September 29, 2015
Partner
201-896-7165 rmarsico@sh-law.comThe Federal Bureau of Investigation (FBI) is warning businesses about a sophisticated email scheme that has resulted in $1.2 billion in losses worldwide. In the United States, scammers defrauded more than 7,000 companies between October 2013 and August 2015.
The Business Email Compromise – or BEC scam – typically targets businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. The perpetrators compromise legitimate business e-mail accounts by utilizing social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.
The FBI last alerted businesses about the so-called BEC scam at the beginning of the year. The agency is sounding the alarm again because there has been a staggering 270 percent increase in identified victims and exposed loss since January 2015. “The scam has been reported in all 50 states and in 79 countries,” the FBI alert states. “Fraudulent transfers have been reported going to 72 countries; however, the majority of the transfers are going to Asian banks located within China and Hong Kong.”
While the BEC scam can take a variety of forms, the FBI’s latest alert highlights an increasingly common variety that involves fraudsters identifying themselves as lawyers or law firm representatives. The scammers contact victim businesses by phone or email and claim to be handling confidential or time-sensitive matters. According to the FBI, the perpetrators pressure victims to act quickly or secretly in arranging the transfer of funds. Additionally, the fraud may be timed to occur at the end of the business day or work week or to coincide with the close of business of international banks or other financial institutions.
To defend against BEC scams, the FBI recommends that businesses adopt cybersecurity and data protection measures, including:
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