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How business email scams can produce false fraud charges

Milwaukee companies often do business on a global scale, something that was a fairly complex undertaking until the Internet opened up instant, worldwide communication. The benefit of facilitated international trade also has come with substantial economic risks. The movement of money between countries can make businesses and their employees vulnerable to criminal charges.

The Federal Bureau of Investigation has seen a significant uptick in business email compromises. BECs represent the larger, business version of personal email scams. Individual computer users lose $6,000 on average to legitimate-looking but fraudulent emails, but when businesses fall for an email scam, losses soar to an average of $130,000.

The dead giveaways many Wisconsin computer users now recognize as fraud in spam messages, like poor spelling and grammar usage, aren’t quite so evident in business email compromises. As Internet technology has advanced, so have scamming techniques, particularly for business targets. Fraud emails directed toward businesses have taken on a decidedly more professional and, therefore, believable appearance.

Malware becomes embedded in a company network to extract information used to support illegal wire transfers. Huge amounts of money are directed to overseas banks without any immediate hint of wrongdoing. Since 2013, the FBI has investigated over 7,000 business email compromises claims in the costing U.S. companies more than $740 million.

The number of business email compromises has increased significantly, at home and abroad, since the U.S. government began tracking BECs in 2013. The sophistication of the fraudulent activities – cleverly-engineered email compromises and computer intrusion — has led the FBI to suspect foreign organized crime operations. Most stolen business money is directed to banks in China.

How can global Internet crimes have personal consequences? Business fraud is often an inside job. People employed to handle company finances may be accused of collusion in illegal wire transfers — a criminal defense attorney can help prove a defendant was not engaged in fraud.

Source: Federal Bureau of Investigation, “Business E-Mail Compromise,” Aug. 28, 2015

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