Firm loses $44m due to an online email scam

Europe’s largest Electrical Cables Manufacturer Leoni AG fell for an online scam and transferred $44m into a wrong bank account.

If you believe that only unsuspecting users can become the victims of email scams then you are mistaken. Even high profile and well-known companies can fall prey to the malicious tactics of scammers.

This news bit proves just that.

The leading manufacturer of electrical cables and wires in Europe, Leoni AG, is the latest victim of an online scam. It must be noted that Leoni AG is no small firm, it is the fourth largest manufacturer of wires and cables around the world. Naturally, the company would have implemented all probable and reliable measures of security, yet, they had to suffer a huge loss of $44.6 million due to the scam. Now that’s a whopping amount, it would be equivalent to €40 million.

Must Read: Criminals Steal 1.44 billion Yen ($13 million) from 1,400 ATMs in 2½ hours

How did it happen?

The company’s chief financial officer was tricked into transferring this huge sum to the wrong bank account. This happened earlier in August and after two weeks of investigation, it has been discovered that the perpetrators of the scam managed to pull it off quite conveniently.

Always do a background check on emails you receive on such a high-profile level

The scammers simply sent emails that seemed like official payment requests. This is a widely used method and is called a whaling attack or CEO fraud. Once this was done, they proceeded to the next step and sent the emails to a satellite at the Bistrita factory of Leoni, situated in North Romania.

The emails were received by the company’s financial officer and the officer believed that the messages have been sent by Leoni’s top execs in Germany. This is why the financial officer decided to pay $44m because the company’s system was considered one of the safest in Europe.

The money has been transferred to a bank that is located in the Czech Republic. But, the sad part is that scammers didn’t leave any trail of them and therefore, they haven’t been identified yet. 

Must Read: Bank implements poor security measures, loses $81 million

In a press release Leoni AG acknowledged that the firm was scammed:

“Leoni AG had become the victim of fraudulent activity with the help of falsified documents and identities and the use of electronic communication channels. As a result, company funds were transferred to accounts abroad. The Management Board immediately launched an investigation into the events and is currently assessing claims for damages and insurance claims. It has also reported the matter to the police criminal investigators. The damage amounts to an outflow of liquidity totalling around EUR 40 million. The criminal activities have not affected the IT infrastructure or data security.”

Must Read: GoDaddy customers targeted by clever phishing scam

The Romanian Directorate for Investigating Organized Crime and Terrorism believes that the scammers were able to conduct the scam successfully because they had detailed knowledge about the company’s internal processes of approving and processing transactions and money transfers. Since Leoni’s Bistrita factory often receives payment requests from executives in Germany, therefore, there was no doubt in the officer’s mind about a foul play.

Total
0
Shares
Related Posts