Business Email Compromise

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Business Email Compromise

Business E-mail Compromise or E-mail Account Compromise is a sophisticated scam targeting both businesses and individuals performing wire transfer payments.

The scam is frequently carried out when a subject compromises legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.

The scam continues to grow and evolve, targeting small, medium, and large business and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses. The scam has been reported in all 50 states and in 150 countries. Victim complaints filed with the IC3 and financial sources indicate fraudulent transfers have been sent to 115 countries.

Based on the financial data, Asian banks located in China and Hong Kong remain the primary destinations of fraudulent funds; however, financial institutions in the United Kingdom, Mexico and Turkey have also been identified recently as prominent destinations.

The scam has heavily targeted the real estate sector in recent years. Victims participating at all levels of a real estate transaction have reported such activity to IC3. This includes title companies, law firms, real estate agents, buyers and sellers. Victims most often report a fake e-mail being sent or received on behalf of one of these real estate transaction participants with instructions directing the recipient to change the payment type and/or payment location to a fraudulent account. The funds are usually directed to a fraudulent domestic account which quickly disperse through cash or check withdrawals. The funds may also be transferred to a secondary fraudulent domestic or international account. Funds sent to domestic accounts are often depleted rapidly making recovery difficult.

Domestic money mules are frequently identified in connection with the real estate trend. Scammers often recruit money mules through confidence/romance scams. The scammer may groom a victim and then direct them to open accounts under the guise of sending or receiving funds as directed by the scammer. The accounts opened to facilitate this activity are typically used for a short period of time. Once the account is flagged by the financial institutions, it may be closed and the scammer will either direct the romance/scam victim to open a new account or move on to grooming a new victim.

The best defense is to verify all requests for a change in payment type and/or location. Scammers often request that payments originally scheduled for check dispersal be made via wire instead.

Scammers will use information that is publicly available on real estate listing sites to target victims. This may include homes that are for sale and the progress of the sale such as “under contract” as well as the contact information of the real estate agent. Be wary of any communication that is exclusively e-mail based and establish a secondary means of communication for verification purposes.

If you discover a fraudulent transfer, time is of the essence. First, contact your financial institution and request a recall of the funds. Different financial institutions have varying policies; it is important to know what assistance your financial institution will provide when attempting to recover funds.

Regardless of dollar loss, file a complaint with www.ic3.gov.

If you believe you have been a victim of this type of scam you should promptly report it to the IC3's website at www.IC3.gov. The IC3's complaint database links complaints together to refer them to the appropriate law enforcement agency for case consideration.

Remember - always watch for scams!