Feeds

Florida man sues bank over $90K wire fraud

Why didn't you warn me about Trojans!

  • alert
  • submit to reddit

The essential guide to IT transformation

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 Around $20,000 was withdrawn before the account involved was frozen.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

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.