Berks Barrister Winter 2018 - 34

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TECHNOLOGY
FRANKLY SPEAKING

BUSINESS E-MAIL COMPROMISE (BEC)

The $5 Billion Dollar Scam
Targeting You
By Jeffrey A. Franklin, Esquire

Y

our trusted employee comes to your office with a panicked
look. What could have happened? He describes how the
real estate closing seemed to go normally, but the wired
funds never arrived. Or your bookkeeper asks if you got the W-2s
you asked her to send you urgently late yesterday.
These events occur everyday in the United States and
sometimes here in Berks County. A locally-based computer
consulting company had taken precautions such as having
installed and updated security software and patches and trained
its employees regarding scams. But as widely reported, when
the person who handles financial information for the company
received a request by e-mail apparently from the boss, she
dutifully provided the requested W-2s for all of the employees.
Unfortunately, the e-mail did not come from her boss and the
W-2s did not go to him. Later, as employees filed their taxes, the
IRS notified them that "they" already had filed their tax returns
and were issued large refunds.
Another Berks County-based company bookkeeper received
an e-mail from the company CEO to transfer about $100,000.00.
She was just about to do so but then she decided to confirm the
transaction with the CEO by telephone. He had not sent such a
request. She saved the company about $100,000.00 by making that
call.
What is Business E-mail Compromise?
Business E-mail Compromise (BEC) is a scam using e-mail to
impersonate a business executive, employee or other person with
authority to request payments or W-2 information.
34 | Berks Barrister

How Does It Start?
A BEC scam may start when one downloads malware by
clicking on a link or attachment in an e-mail from a scammer.
Many times the spoofed e-mail comes from an address that
is very similar to the real address, such as ceo@abc_company.com
might appear as ceo@abc-company.com.
Most victims report using wire transfers as a common method
of transferring funds for business purposes. The fraudsters will
use the method most commonly associated with their victim's
normal business practices. The scam has evolved to include
the compromising of legitimate business e-mail accounts and
requesting Personally Identifiable Information (PII) or Wage and
Tax Statement (W-2) forms for employees, and may not always be
associated with a request for transfer of funds. Some criminals will
even call to confirm the e-mail request.
Who Is Being Targeted?
Everyone; the victims of the BEC/EAC scam range from
small businesses to large corporations. The victims continue to deal
in a wide variety of goods and services, indicating that no specific
sector is targeted more than another. The following industries are
popular with the criminals:
* Legal Services
* Real Estate (Buyers, Sellers, Realtors, Title Companies)
* Third Party Payroll
* Import/Export
* Education, Government, and Healthcare
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Berks Barrister Winter 2018

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