Feeds

Florida man sues bank over $90K wire fraud

Why didn't you warn me about Trojans!

  • alert
  • submit to reddit

Combat fraud and increase customer satisfaction

A Miami businessman is suing his bank after $90,000 was lifted from his firm's online banking account following a computer virus attack. Joe Lopez, 42, filed suit against the Bank of America in Miami Circuit Court last week alleging that the bank was negligent in failing to protect his account from compromise through known risks, the South Florida Sun-Sentinel reports.

The case is thought to be the first time a customer has sued a bank over cybercrime losses in the US. It will test the balance of responsibilities between banks and their users over ensuring the security of online banking transactions.

Lopez runs a small printer ink and toner business in Miami. He regularly uses wire transfers both to send and receive money from business contacts in the US and Latin America.

But on 6 April he discovered an unauthorised wire transfer of $90,348 to the Parex Bank in Riga, Latvia. Around $20,000 was withdrawn before the account involved was frozen. The remaining $70,000 remains at Parex Bank. Lopez reported the unauthorised transfer to the police. The US Secret Service became involved in the investigation, which featured a forensic examination of PCs used by Lopez and his businesss, Ahlo Inc, that uncovered infection by a Trojan called Coreflood.

Coreflood is primarily designed to conduct Denial of Service (DoS) attacks, but the theory is that the backdoor access it enabled criminals to extract banking passwords and account details entered into Lopez's PC. This remains unproven.

Lopez's legal case is that Bank of America knew of the risk posed by the Coreflood Trojan but failed to inform customers. There's also the question of whether Bank of America was diligent in so easily allowing the transfer of a large sum to a known centre of cybercrime. Lopez alleges breach of contract, negligence and intentional misrepresentation by Bank of America in a suit aiming to recover his money, plus interest and legal fees. Bank of America has ruled out any breach of its e-banking systems. It denies any responsibility over its customer's losses.

Lopez has taken a second mortgage of his home to keep his business afloat. His attempt to recover his funds from Riga is caught in a tangle of legal and bureaucratic red tape. Lopez's lawyer, Ralph Patino, hopes the suit will attain class action status, allowing more fraud victims to sue their banks over cybercrime losses.

Lopez has stopped using wire transfers. ®

Related stories

Trojan targets UK online bank accounts
UK banks launch anti-phishing website
SA police arrest man in Absa Net bank fraud case
Fraudsters recruit phishing middlemen
Phishing losses overestimated - survey

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.