Business email compromises (BEC) are among the most common methods of B2B payments fraud and can frequently involve invoice manipulation when a cyber attacker or nefarious actor alters bank information on an invoice to redirect B2B payments into the wrong account. But as this week’s B2B Data Digest shows, the BEC scam isn’t the only case in which invoice fraud can occur, with internal employees — and even CEOs — manipulating B2B bills to evade or make personal payments.
23 of 25 imported items had their invoices altered to allow a New Zealand business to evade GST payments, Stuff.co.nz reports said. An investigation found one executive had been using white-out to manipulate invoices and other financial documents associated with equipment imported by his employer, undervaluing those goods in order to evade tax payments. Reports said the individual had also submitted falsified invoices and altered proof of payment to auditors, with investigators discovering the business underpaid its taxes by nearly $1 million as a result of the scam.
13,750 AUD ($10130) for an invoice payment raised red flags at one Australian firm, whose CEO reportedly used invoice payments to make up for missed payments for shares in the company from which the invoice came. The business, Club Marconi, reportedly paid the invoice to truck leasing firm RENTfleet, shares of which are held by the CEO and his family, the Sydney Morning Herald said. Reports say there is evidence an insider at RENTfleet was colluding with the CEO to issue invoices for work that was never completed, allowing the CEO to pay for shares acquired in RENTfleet using company funds.
$750,000 was recovered in a prevented fraudulent bank transfer by U.S. and Canadian law enforcement, according to a press release by the Canadian Anti-Fraud Centre (CAFC). In collaboration with the United States Secret Service (USSS), Canadian officials said they prevented a possible BEC scam that saved a U.S. company from losing nearly $750,000 when it initiated payment to a fraudulent account. A bank investigator placed a hold on that transfer and initiated a reversal. “I hope this story encourages both individuals and businesses to report scams and fraud when they come across them and to educate themselves further on the variations so they know what to look for,” stated Sergeant Guy Paul Larocque, Officer in Charge at the Canadian Anti-Fraud Centre, and RCMP Mass Marketing and Serious Fraud Coordinator.
$1 million stolen from small businesses by a former bookkeeper landed the individual a three-year federal prison sentence, according to The Boston Globe reports. The individual provided a variety of financial-related services to small businesses, including payroll and payroll tax services, across New England. She reportedly pleaded guilty to wire fraud and tax evasion related to a scam of failing to make payroll tax payments on behalf of her clients and instead pocketed the funds herself. The individual was also ordered to pay as much as $272,138 to the IRS, reports said.