'Fake CEO' Chinese chap cuffed in $54m fraud probe

Money laundering charges after chief exec imitation trick

Money laundering

Police in Hong Kong have arrested a Chinese man on charges of laundering the proceeds of an online robbery that netted millions of dollars.

In January, Austrian engineering firm FACC – which makes aircraft parts for the likes of Boeing and Airbus – admitted that it had lost up to €50m ($54m) after someone impersonating the CEO in an email had authorized the transfer of funds. The CEO and CFO have since been fired.

In the ensuing investigation, the firm managed to recover some of the funds, and the arrestee is accused of signing off on a bank transfer of €4m ($4.5m) to a Hong Kong-based firm. A spokesman for Austria's Federal Criminal Office told Reuters the man was arrested on July 1 and will be charged with money laundering.

A spokesman for FACC said that the company has now found almost all of the money that was stolen, and it has either retrieved or frozen it in foreign bank accounts. He declined to say which countries the money was stashed in.

The problem of CEO impersonation is growing incredibly quickly, according to the FBI. The scammers send requests for money transfers or fake invoices for payment using the email account of senior management and – if the proper controls are not in place – the funds usually get paid.

It's probable that the sheer size of the funds taken from FACC prompted the police to launch a serious investigation, but in the majority of cases the funds are never recovered in their entirety. So make sure your finance officers have controls in place to double-check outgoing funds. ®


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