Email Fraud - Memphis Grizzlies

 

Email Fraud can affect not just individuals, but corporations as well.  Let’s examine this example of email fraud and how it affected a California Corporation.

MEMPHIS GRIZZLIES OWNER VICTIM OF EMAIL FRAUD

Ubiquiti Networks Inc. of San Jose, California said it had lost $ 46.7 million to a “business email compromise fraud involving employee personation.” The fraud was revealed on August 6, 2015 in a document filed by Ubiquiti with the U.S Securities and Exchange Commission (SEC).

Memphis Grizzlies controlling owner, Robert Pera, is the CEO of Ubiquiti. The SEC filing said in part that “the incident involved employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department.”

IMPERSONATION OF CORPORATE EMPLOYEES BRINGS NEW DIMENSION TO INTERNATIONAL EMAIL FRAUD

Fraud on corporation or individuals does not always come in the form of a data breach. It can come in form of impersonation of employees in finance department with bogus and forged request for wire funds transfer. In the case of Ubiquiti, “the incident involved employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department. This fraud resulted in transfers of funds aggregating $ 46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties.”

PROMPT LEGAL ACTION CAN MITIGATE LOSSES FROM EMAIL FRAUD

Too often, corporation and individuals procrastinate with endless investigation once fraud is discovered. Some of the funds lost can be recovered with prompt civil action in foreign jurisdictions by  issuing alerts and stop orders on recipient banks of fraudulent funds. Law enforcement in authorities in local and foreign jurisdiction must be promptly notified of fraud on the corporation or individuals.

Ubiquiti appeared to have taken this step.  As soon as the Company became aware of this fraudulent activity it initiated contact with its Hong Kong subsidiary’s bank and promptly initiated legal proceedings in various foreign jurisdictions. “As a result of these efforts, the Company has recovered $8.1 million of the amounts transferred. Furthermore, an additional $6.8 million of the amounts transferred are currently subject to legal injunction and reasonably expected to be recovered by the Company in due course. The Company is continuing to pursue the recovery of the remaining $31.8 million and is cooperating with U.S. federal and numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation. The Company may be limited in what information it can disclose due to the ongoing investigation.”

In its SEC filings, Ubiquiti stated that “the ultimate amount of the loss will depend, in part, on the Company’s success in recovering the funds. The Company may not be successful in obtaining any insurance coverage for this loss. The Company currently believes this is an isolated event and does not believe its technology systems have been compromised or that Company data has been exposed.”

CONTACT AN INTERNATIONAL EMAIL FRAUD ATTORNEY

If you are a corporation or individual who suspects that you have been or are a potential victim of email fraud, contact our international email fraud lawyer at Salu & Salu Law Firm for a consultation. Call us at 1-888-56-6690 or 662-510-7272 or use the contact form.  We are experienced in assisting victims of criminal activities.