There is more than one way to commit B2B payments fraud. But in this week’s B2B Data Digest, a roundup of the latest cases reveals all roads lead back to the invoice. Whether it’s the Business Email Compromise or a scheme to avoid customs duties, the invoice can be a dangerous source for financial crime.
15 years in prison is a doubling of a sentence previously imposed on a Texas man for invoice fraud. MarketWatch reports said the individual saw his sentence more than double following law enforcement’s discovery of a $12 million invoice fraud scheme he was reportedly running while already awaiting trial for a separate scam. Federal prosecutors said this person falsified invoices to defraud a supply chain financing firm between late 2018 and early 2019. The crime, which involved submitting fake invoices to receive financing, occurred while out on bail for a separate crime of reportedly siphoning $2.5 million from a business for selling cattle that did not exist.
$6,385 was transferred to an Ireland social media influencer’s bank account in part of what law enforcement says is a broader invoice fraud scam. Local reports revealed the individual used her bank account to receive fraudulent funds resulting from a Business Email Compromise (BEC) scam, in which fraudsters had posed as a supplier and requested payment from a local business. The day that the BEC email went out, funds were transferred to the influencer’s bank account. According to reports, the individual said she did not know that her bank account was being used for this purpose. She is now awaiting sentencing.
$99,185 was reportedly stolen via invoice fraud from one South African business. An IT professional employed by a business known as Cape Cookies CC is now the subject of a U.S. extradition effort following an alleged invoice fraud. Reports in Bitcoin.com said that the individual is accused of fabricating invoices from false suppliers and having his employer pay those bills to the account listed on the invoice, which was his personal bank account. Reports said the individual is accused of siphoning an estimated $99,185. South African authorities discovered he had fled the country. Now, the U.S. government has filed a request for extradition.
$500,000 has been stolen via BEC scam from businesses across New Mexico. The Federal Bureau of Investigation has yet again issued a warning over the Business Email Compromise threat. This time, the FBI’s office in Albuquerque, New Mexico alerted businesses as well as government entities and school districts that they should remain vigilant to avoid BEC scams, which the Bureau said have now cost businesses in the state more than $1 million. The FBI pointed to one county in the state that lost about $500,000 after falling victim, as well as a small private school system that narrowly avoided losing more than $55,000 after being targeted.
“Businesses, government agencies, and schools have been through a difficult year, and many are still trying to get back on their feet,” said Raul Bujanda, Special Agent in Charge at the Albuquerque FBI Division. “They need to be aware that cybercriminals won’t give them a break. The FBI and our partners urge communities to be vigilant and educate themselves about online scams like BEC.”
$6 million will be paid to the U.S. by defendants in an invoice fraud designed to avoid customs duties. A press release from the U.S. Department of Justice said a New York District Attorney has reached a settlement with various clothing companies and their former CEO following the admission that the defendants falsified invoices to avoid customs costs. In a statement, U.S. Attorney Audrey Strauss said the defendants “engaged in a variety of fraudulent schemes to short-change the Government of customs duties owed for imported clothing by falsely under-reporting its value.” HSI Special Agent in Charge Peter C. Fitzhugh went on to explain, “For over a decade these clothing companies used ‘double-invoice’ schemes to underpay customs duties that were owed to the U.S. for garments being imported into the country, resulting in millions of dollars in customs duties lost.”