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One of the world’s leading wire and cable manufacturers, Leoni AG, has been swindled out of a jaw-dropping 40 million Euros (approximately US $44 million) after it was targeted by an email scammer.

As Softpedia reports, a young woman working in the finance department of Leoni’s factory in Bistrita, Romania, received an email in mid-August claiming to have come from the company’s senior German executives.

Using inside information to appear more convincing, the email was able to trick the recipient into believing it was a genuine request for a staggering 40 million Euros to be transferred out of the company’s bank account. Unconfirmed reports claim that the stolen money was switched into bank accounts in the Czech Republic.

The revelation of how the fraud was perpetrated comes after a two-week investigation by Leoni and Romania’s DIICOT (Directorate for Investigating Organized Crime and Terrorism) law enforcement agency.


Leoni statement

Leoni’s stock has dropped almost 7 percent since it announced it had been attacked.

There are obvious financial losses that corporations can suffer as a result of business email compromise (BEC) attacks, but it’s worth regular employees realizing that they might also feel the repercussions if they are the unwitting participant in CEO fraud.

For instance, an employee of payroll and merchant services provider Alpha Payroll was fired earlier this year after being duped into sending W-2 data to a scammer posing as the company’s CEO.

Business email compromise, also sometimes known as “whaling” or “CEO fraud,” is a growing problem.

Well-known corporations that have fallen foul of such attacks this year have included Snapchat and Seagate.

disclosure-letters

In June 2016, the FBI reported that companies had been stung to the tune of US $3 billion as a result of business email compromise attacks and that there had been a 1300% increase in identified losses since January 2015.

As long as attackers continue to spirit away large sums of money from companies, the business email compromise attacks are going to intensify. All organizations need to educate their staff about the threats and put measures in place to reduce the chances of them becoming the next victim of a whaling attack.

Learn more about the common techniques used in phishing attacks, and how to protect against them, in this guide by Tripwire’s David Bisson.

 

Editor’s Note: The opinions expressed in this guest author article are solely those of the contributor, and do not necessarily reflect those of Tripwire, Inc.

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  • Simon Ritchie

    > All organizations need to
    educate their staff about the threats and put measures in place to
    reduce the chances of them becoming the next victim of a whaling attack.

    Hmm. Not quite. They also need to educate their executives so that they never demand that the underlings break the rules for their convenience. The companies that get stung by these cons probably have measures in place to ensure that large payments are signed off by the appropriate people, but if executives are in the habit of telling staff to bypass the rules when it suits them, all those measures go out the window.

  • disqus_Tgv8PPb9Oy

    This is one of those cases in which two gross errors led to monetary loss: first, no one employee should EVER be able to transfer that amount of money to anyone on his or her own.

    Systems should have been put in place to prevent such an action from occurring.Second, this employee was obviously never trained to take all such audacious requests to her manager or even the CEO of the company for comfirmation. Simply because someone seems to possess inside information doesn’t mean that the requester is legitimate, but employees have to be taught that this can be the case. Both of these failures were caused by indifferent and ignorant managers; I suggest that Leoni clean house in the management suite before firing this low-level employee. Of course, in reality, this won’t happen; it’s easier to blame the failure on one grunt than to put the responsibility where it belongs.

  • Mark Jacobs

    If I had been the employee on the receiving end of that email asking for 40 million euros, I would have replied to the email with a simple “Not on your nelly – now sack me (if you can)!”. People are so gullible that this becomes possible. Weak, spineless, fearful of “the boss” employees are not a beneficial attribute to any company. Email is not to be regarded as authority in cases like this.

  • David

    Leoni appear to have amazingly poor business process: no attempt to authenticate request nor the receiving bank account, and only one pair of eyes on this. Some senior heads need to role.