Fraud by false transfer order to Poland

septembre 2021Droit des affaires

  1. Droit des affaires
  2. Fraud by false transfer order to Poland

A lthough the so called “president’s fraud” or fraud by false transfer order is known for many years now, it has not lost its scope and many companies (ranging from the most prestigious publicly listed companies to local SMEs) still fall prey to scammers. Poland is often used as the first transit point for embezzled funds.

How does the fraud work?

Usually, an individual poses as the top executive of the target company and urges an employee of its accounting or finance department to urgently make an international bank transfer for a highly confidential transaction (for example to, supposedly, acquire shares in market, avoid tax adjustment, etc.).

How is it possible that these requests are met without the scam being noticed?

The crooks prepare for the operation a long time in advance. They study the organization of the target company using information they find on the Internet as well as that published directly by the company. They frequently manage to intercept the signature of the company’s director, as it appears on official documents.

The groundwork can be much more advanced and may involve more than one person. As a matter of fact, fraudsters repeatedly go as far as to introduce an accomplice within the target company to better understand its operation. After these careful preparations, the criminals take action and ask the “chosen” employee by email or phone to make one (or more) bank transfers.

To establish contact with this employee, e-mail mailboxes of the target company managers can be hacked. Thus, fraudster’s messages are sent from the e-mail address of an executive who is allegedly giving the order. However, more often than not, scammers create an e-mail address so close to the original that the recipient may truly believe that it is the genuine address (for instance, one letter is changed in the company’s name).

The fraud is sometimes operated directly by telephone. At first sight, such gimmick seems easier to unmask. However, a well-prepared fraudster knows how to imitate the voice and the way of speaking of the executive he acts as. When you hear the favourite words or phrases of your boss, it is just as easy to be fooled.

False transfer scams may vary from one another. These are some of the most frequent variations:

  • individuals pretend to be suppliers (or contractors) and communicate a change of bank account on which the target company should make its payments from now on,
  • “technicians” have just updated the bank’s software and request from the target company a “test transfer” on a dedicated bank account,
  • the target company’s executive carries out a completely confidential acquisition, secret even within the company, which is why he asks a chosen person (most frequently from the accounting department) not to reveal the transaction to anyone else…

The final destination of these transfers is often a remote country, but the first transfer is, in order not to arouse suspicion, frequently made to a country of the European Union. For example to Poland.

How to recover funds?

The first days, even the first hours, are essential. It is not without reason that these scams are frequently initiated on Friday afternoons, the day before a national holiday or a long weekend. By the time the affected company realizes that it had been a victim of fraud, criminals often had enough time to conceal the funds.

Thus, as soon as the company becomes aware of the attack, it must act immediately. It is essential to alert of the improper transfer not the only company’s bank but also the recipient’s Polish bank. Fortunately, it happens that the funds have not yet completely vanished and that all or part of the sum is likely to be recovered.

In Poland, a bank suspecting that funds come from a criminal origin has the possibility of blocking an account for 72 hours without any judicial authorization of seizure being required. However, this blockade is far from being automatic. What is more, 72 hours is a very short lapse of time, barely enough to obtain authorization from the Polish Prosecutor to freeze the funds for a longer period of time.

It is therefore in the victim company’s best interest to contact a specialized law firm which will be able to get the bank to face its responsibilities and which will immediately file a complaint to the local prosecutor. Time is a key factor in these types of affairs, and our interventions tend to significantly accelerate the investigation.

The lawyer’s role does not stop there. It is just as vital to represent the victim company’s interests during the Prosecutor’s investigation. As a matter of fact, Prosecutors do not restore the funds easily nor hastily before the end of legal proceedings. While possible, such decision may only be the result of the victim’s well documented initiative.

Our law firm is currently assisting in France and Poland several companies that are victims of such actions.