Invoice Fraud: Businesses Scammed Out of Millions of Dollars

How Were Millions of Dollars Stolen from Google and Facebook?

A thief from Lithuania with the name of Evaldas Rimasauskas was caught laundering money from halfway around the world from major California companies that we all know and love: Facebook and Google. He was able to steal $122 million dollars from both of these companies by committing major invoice fraud and forging signatures from the companies while pretending to be a hardware manufacturer from Quanta Computer Inc.

He wrote fake invoices for a plethora of fake services that he said he was offering and claimed to be their business partner. However, none of these services were being provided to these companies. The companies believe these invoices and ending up signing them, and from there he was able to forge these signatures to other documents sent to their financial departments. These invoices were partnered up with fake contracts and letters that had forged signatures on them, as well as emails that seemed to be from corporate executives.

Because of this invoice fraud, he was able to steal $99 million dollars from Facebook and $23 million dollars from Google. He admitted to being guilty of identity theft, committing fraud in the United States, and money laundering crimes. He gave up $50 million dollars to both of these companies, but they are still missing $73 million dollars of their hard-earned money. He now faces 30 years in prison for all the charges he has pleaded guilty to.

Other Businesses That Were Affected By Invoice Fraud

Facebook and Google are not the only companies that were victims of invoice fraud. According to the FBI, there was a 136% increase in business email fraud where these fake invoices come from. This has caused companies to lose out on thousands, and sometimes even millions, of dollars which has caused some companies to even file for bankruptcy.

For example, there was an accountant at a small business firm in New York who received emails from a legit-looking business email address. This person who was emailing the accountant claimed to be their business partner that they were indebted to for their legal services. This “company” kept asking the assistant to release more and more money, totaling up to $700,000 in a year.

Once they found out it was a scam, they tried contacting their bank to get their money back. However, since the assistant willingly wired the money over to the scammer, they were unable to get their money back. This made their company come close to declaring bankruptcy since they lost so much money due to invoice fraud.

Another company, Diesel Jeans, declared bankruptcy due to invoice fraud and store thefts. They lost 1.2 million dollars due to bad investments, fraud, and store theft over the last three years, which led to their plummet. They are no longer being sold at the moment due to spoofers stealing their hard-earned money, but they are slowly trying to get back into cheaper department stores. This just goes to show just how much power scammers can have over your company if you let them, they can literally shut down your business.

How Did Barbara Corcoran Get Scammed Out of Thousands

Even well-known business executives who are well-known for investments can fall victim to such a tragedy. Barbara Corcoran of beloved television series Shark Tank recently lost $400,000 due to an invoice scam. The person pretended to be her assistant and asked the bookkeeper for a renovation payment. The bookkeeper and Corcoran thought this person was the assistant and they weren’t suspicious whatsoever, so they wired the money to the fake assistant.

Corcoran then emailed her assistant to follow-up about something, and realized that her assistant’s actual email address was just one letter off from the one they wired money to; the scammer misspelled the assistant’s email address by one letter. She thought her money was really gone and would never see it again. Thankfully, Corcoran’s bank asked the German-based bank who received Barbara’s money to freeze the transfer before it was deposited into the scammer’s bank in China.

How Should Businesses Prevent Invoice Fraud From Happening?

Educate your employees on what invoice fraud is. If your employees don’t know how to spot fake emails, they are more likely to respond to these scammers with whatever they ask from the employees. However, if you set up a meeting educating your employees on how to spot fishy emails, chances are they will be less likely to send out hard-earned money to spoofers.
Only trust certain people with your finances. The fewer people that have access to your company’s finances, the better. This means there will be less of a chance that your company will be a part of a financial scam. However, it is still important to train these few individuals on how to spot invoice fraud so they will be less likely to take part in it.
Require multiple people to sign off on financial decisions. If there is just one person making financial decisions for the company, chances are they could make a mistake and not spot when they are being scammed. However, if you find a trusted partner or few people to look over your financial decision carefully to make sure there are no signs of being scammed, chances are you’ll be in the clear from a fraudster.
Talk to your bank about multiple factor authorization. This could be sending a confirmation email, calling you, asking for ID, or making sure you’re in person at the bank before you can wire money to anyone. This would help prevent someone from pretending to be you and making financial decisions for you. If you use multi-factor authorization with your bank, then you’ll be able to have a peace of mind that only you and people you trust will have access to your finances.
Check for misspellings in names or email addresses. If someone is asking for money and claims to be someone you trust, check the email address and name of the person sending the email to make sure nothing was misspelled. Like the Barbara Corcoran case, scammers usually pull an email address from someone you trust so that you can trust in sending them money. They will misspell it by one letter or character so that they are able to use that email address, hoping that you don’t notice it being misspelled. Take a magnifying glass if you need to and read it letter by letter to make sure that it is from someone you trust.
Don’t do any financial transactions or discussions over email. If you need to talk to someone about a financial decision, call them on a trusted number, set up a video chat, or meet in person to ensure you’re talking to the person you trust. If that same person is emailing you about financial decisions, email them back asking them to set up a meeting so that you can discuss it further. This will prevent any accidents from happening in case you happen to miss an email address being misspelled.
Call your bank IMMEDIATELY if you have wired money to a suspicious account. In some cases, you can ask for a wire recall if you show your bank all the original messages from the scammer and their requests.
File a complaint with the FBI if you have been scammed. Even if you have been scammed and your money is long gone, it is never too late to prevent other companies from being scammed. If you report your scammer, the FBI has more of a chance to catch them so that other companies won’t get scammed by the same person.

If you have a suspicion that an email or invoice is suspicious, feel free to run a reverse search on it to make sure the email is coming from someone you trust. If your business has ever been of invoice fraud, make sure to report it so that it doesn’t happen to anyone else.