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What to Do If You Are Victimized By a Wire Transfer Fraud

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These facts are amazingly common. Bob Buyer is purchasing a home and hires an attorney to prepare the contract of sale, review title and confirm no building violations exist. A few days before closing, Bob Buyer receives an email from his attorney’s verified email address advising Bob to wire transfer the closing proceeds to the attorney’s escrow account in anticipation of closing. Bob does so. Then 48 hours later, Bob receives another email from his attorney in preparation for closing and Bob asks the attorney to confirm that he received the wire transfer. The attorney’s response, “What wire transfer?” immediately instills terror in both Bob and the attorney. The attorney denies sending Bob a request for a wire transfer. Bob calls his bank, which advises him that the wire it sent cannot be recalled. Bob calls the recipient bank, which advises him that the wire it received from Bob was then wired again, this time overseas.

There are many variations on this scheme because they are so successful. Hackers will access computer systems and observe activity for months to determine the best way to steal money. Wire transfer fraud is prevalent, and businesses and consumers have to be proactive about protecting themselves. However, if you have already been victimized by wire transfer fraud what can you do?

How to Recover Stolen Funds

  1. Engage an Attorney Quickly. A lawyer can help you determine who you have to notify about what occurred, what actions to take to mitigate your losses, and how to prevent this from happening again.
  2. Contact All Banks. If you realize the fraud soon enough, you may be able to stop your bank from sending the funds or the recipient bank from releasing them to the account holder. If the funds are already gone, the banks can also assist the authorities in tracing the money.
  3. Contact Your Local FBI Office. The FBI can effectuate a Financial Fraud Kill Chain to stop the transfer of funds. To start the process, you must file a complaint with the Internet Crime Complaint Center (IC3).
  4. Find the Source. It is important to engage an eDiscovery vendor to evaluate your emails and computer systems to determine the source of the fraud and if third-party liability exists. The company can also advise regarding how to protect the system from further hacks and implement policies and training for employees to prevent these situations.
  5. Evaluate Third-Party Liability. Your eDiscovery vendor may determine that the problem arose because of the actions or omissions of third parties. For example, in the narrative above, a hacker could have obtained access to the attorney’s email account due to the attorney’s negligence, or in a different situation, some other participant in the transaction process (such as the bank, title insurance company, or seller) could be responsible. In these scenarios, a claim may be viable against the responsible party.
  6. Review Existing Insurance Coverage. Depending on the circumstances, you may have insurance coverage for the losses. If you are suing a third party, that party may have insurance coverage, which will help in recovering money from them.

Wire transfer fraud and other hacking is rising thanks to the increase in remote work. Many people lack sufficient cybersecurity measures at home putting themselves and their employers at risk. Individuals and businesses should educate themselves about cybersecurity as well as learn what legal recourse they have in the event of an attack.

If you have been victimized by wire transfer fraud, contact us for assistance.

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