Commercial email fraud duped nearly 180 Hong Kong and international companies out of more than HK$403mil (RM213.90mil) in the first quarter of 2019 – but one firm from Kuwait managed to recover US$17mil or HK$133.42mil (RM70.81mil) with the help of local police.
Police said on May 10 that the 179 businesses that reported email fraud in the first three months of the year was down 6% – from 191 in 2018. The amount of swindled funds, however, jumped 22% from US$330mil (RM1.37bil) over the same time, according to police.
In this year’s biggest scam, a Kuwaiti wealth fund was tricked by international scammers into transferring US$17mil (RM70.81mil) into a Hong Kong bank account, police said.
The details of the case were typical of corporate email fraud: In March, swindlers impersonating a senior executive from a subsidiary of the Kuwaiti company sent emails requesting money be transferred into a specific Hong Kong account.
Local police were notified when the parent company realised it was a scam and filed a report through a lawyer.
The Hong Kong police’s anti-fraud squad was able to freeze the account where the bilked US$17mil (RM70.81mil) was sent – with help of a local bank – before the money was siphoned out by swindlers.
Police are still looking for the holder of the bank account.
A law enforcement source said it was possible the subsidiary company’s computer system was infected with a virus or hacked, giving scammers access to information about the business and the relationship with the defrauded company.
“The information was then used to convince the parent company to transfer money,” the source said.
According to police, this was the largest fraud case thwarted by the Anti-Deception Coordination Centre so far this year.
Last year, police handled a total of 887 reports of commercial email scams, involving the loss of HK$1.71bil (RM907.49mil). In 2017, 683 companies were conned out of HK$992mil (RM526.47mil).
Email scammers typically hack into the computers or email accounts of targeted companies and businesspeople. They then use the information to impersonate business partners, clients or executives and order money transfers.
In the first quarter of 2019, the anti-fraud squad received 388 requests to block payments totalling more than HK$1.42bil (RM753.60mil). The fraud transfers were halted before they reached scammers’ bank accounts in Hong Kong, mainland China and other countries.
The payments of swindled funds involved different types of deception, including commercial email fraud, online romance scams, investment fraud and phone scams.
The number of requests was a 40% increase, compared to 278 cases involving HK$813mil (RM431.46mil) in the same period last year.
The team successfully helped to thwart the payments of HK$700mil (RM371.49mil) in 161 out of the 388 cases. Police said in the same period last year, the centre blocked the payments of HK$104mil (RM55.19mil) in 71 out of 278 cases.
Hong Kong police have urged individuals and companies to verify the identities of contacts and to make sure a request is legitimate before transferring money.
The police recommend companies set up confirmation procedures and multiple approval mechanisms to verify the identity of the recipient of funds and the genuine purpose of the transfer. – South China Morning Post