Scammers tricked local company to transfer $71k

Tuesday 1 December 2020 | Written by Emmanuel Samoglou | Published in National, Technology

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Scammers tricked local company to transfer $71k
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Hackers have recently infiltrated the email system of a local company resulting in a multinational investigation to recoup funds, prompting a call by investigators for public awareness of suspicious activity and potential scams.

The resurgence of an elaborate email scam has prompted government financial investigators to initiate public awareness campaign.

In September, the Financial Intelligence Unit (FIU) dealt with a case where a local business’ email account was compromised, resulting in an investigation and ongoing efforts to seize and repatriate the lost sum.

Explaining the case, the Unit’s senior intelligence analyst Walter Henry said an associate based in a foreign country received an email from the local business using a familiar address.

But unbeknownst to the business associate and the local company, the email account had been compromised by a hacker, who sent an email with a request to make a payment of US$50,000 ($71,000) to a foreign bank account.

Thinking the request was legitimate as it had come from the familiar address, the business associate made the payment.

The local business and their associate had unwittingly become victims of Business Email Compromise (BEC), which the Financial Intelligence Unit describes as “a serious threat to businesses, companies and individuals on a global scale”. 

It is also known as “Email-Scam” or “CEO-Fraud”.

“We know very little about how these guys operate, that’s why we have to be proactive with awareness,” Henry said.

This form of email fraud first appeared on the radar of local authorities in 2017, when a local company was conned into transferring approximately NZ$40,000 to two accounts in Malaysia.

“They picked up on that email and didn’t question it, they just went ahead and processed the transaction,” said Henry.

After contacting authorities there, the FIU and their Malaysian counterparts were able to locate and freeze the funds before returning to the local business. 

“That was the first of any kind that we had come across, or was brought to our attention,” he added.

Since then, similar scams have targeted senior government officials and even former Prime Minister Henry Puna.

To deal with what it has deemed as an increasing threat, members of FIU staff - which include compliance analyst June George, IT analyst Maru Willie, and senior investigator Wayne Robati - have recently participated in online workshops organised by the Federal Bureau of Investigation (FBI) and the New Zealand government, as well as enrolling in a cybersecurity course through the University of the South Pacific.

But while local officials are developing their technical know-how, ultimately the public needs to exercise caution and remain alert for suspicious online activity, Henry said.

“It’s up to the individual businesses to be vigilant, and have appropriate checks and balances in place,” he said. “Don’t take things at face value.”

The FIU partners with Cook Islands Police and a number of international agencies to investigate email fraud, including the United States Treasury’s Financial Crimes Enforcement Network, Interpol, FBI, and New Zealand’s Financial Intelligence Unit (FIU).

The FIU an independent unit of the Financial Supervisory Commission.