BEC or ‘business email compromise’ and related fraud continues to increase at an alarming rate. Although BEC fraud losses are severe, it is often an indicator of other underlying severe issues for the business. Insurers deny many insurance claims related to BEC fraud. Moreover, ensuring the appropriate submission of any claim, reports to law enforcement, regulators and other stakeholders must be carefully considered.
The successful investigation of any BEC fraud is time-sensitive. It requires independent cybersecurity and fraud professionals collaborating to gain an understanding of how the BEC fraud occurred. They must collect forensic evidence, assess financial losses and other damages, deliver expert reports backed by unbiased forensic evidence, assist in appropriate remediation services, and perhaps most importantly, ensure that our clients’ interests are well-protected.
Step I: Organized Crime groups probe and target businesses and 3rd Parties with which they conduct business, often through spear-phishing or other hacking mechanisms.
Step 2: Vulnerabilities at the victim company and their 3rd party are exploited
Step 3: Exploitation of Resources: Victim companies are socially engineered via persuasion and pressure to exploit human nature. Victim company systems and data may also be compromised and manipulated, including creating backdoors into critical financial and business systems.
Step 4: Wire transfer: Upon transfer, the funds are steered to a bank account controlled by the organized crime group, violating 18 US Code § 1343 Fraud by wire.
Did you know that even if the government recovers the victim’s stolen funds, BEC and related fraud victims may not receive restitution if the government deems the victim’s business negligent or reckless? Contact Withum today to help ensure your business’ assets and interests are protected.
At Withum, our forensic accounting expertise, combined with digital forensics and cyber response solutions, can help prevent another BEC fraud from occurring again.
Our cybersecurity and forensic accounting consultants with expertise in all facets of forensics can assist in BEC fraud cases as follows:
Confirm whether your IT or Managed Service Provider (MSP) is secure. Are your third-party vendors with whom you do business secure? Plan on acquiring, selling, or merging with a company?