NEW HAVEN, Conn. — The Department of Justice (DOJ) announced Friday that it had recovered significant amounts in two stolen wire transfer cases last summer.
The government recovered $2,288,385 for victims of two separate business email compromise scams. One of the victims was the New Haven School Department, and the other was a New Haven-based healthcare company.
According to the DOJ, a business email compromise scam, which usually involves email spoofing, involves the creation of email messages with a deceptive sender display name. When a bad actor engages in an email spoofing attack, the bad actor sends an email header that displays an inaccurate sender address, which can deceive the receiver unless the receiver inspects the header closely. This inaccurate sender address is usually someone the receiver knows and trusts, so the receiver might open malicious links or engage in risky behavior that the receiver would otherwise not engage in. In each of these cases, the bad actors impersonated one of the parties to the real transactions and replaced the intended beneficiary account with their own just before payment. By changing the intended beneficiary account, the bad actors commit a business email compromise scam.
The criminals first hit New Haven’s Board of Education in June 2023.
Officials said at the time that the cyber attack targeted the Board of Education's Chief Executive Officer and Chief Operating Officer in what was described as a "business email compromise." Thieves got access to the CEO's email in late May. In June, they made six successful and one failed attempts to steal money by watching conversations and inserting themselves in the discussion to steal money.
They impersonated the COO and vendors to make requests for electronic transfers, one of them a transfer to First Student bus service for $5.9 million, and another for Shipman and Goodwin law firm for more than $76,000.
The thieves attempted again in July with payment for SJ Cleaning services for work at the New Haven Police Department.
New Haven sent approximately $5.9 million to the account.
The government successfully seized $1,187,691 of the stolen money that was contained in two bank accounts. When combined with an additional approximately $3.6 million that was returned by the financial institutions with the assistance of law enforcement, the government was able to significantly mitigate the loss to the City.
The second forfeiture action involved a New Haven-based healthcare company that was a victim of a BEC attack. In April 2023, the company sent approximately $1,652,254 via a wire transfer to bogus accounts. The company discovered the fraud in late May 2023 after it received a payment reminder from its insurance company. The investigation revealed that someone had created an email address that mimicked that of a known employee of the insurance company. By the time the BEC scam was discovered, approximately $551,000 had been transferred out of the account that the victim wired the money into. The government successfully seized $1,100,694 remaining in the account, and the company was reimbursed by insurance for the remaining loss.
Doug Stewart is a Senior Digital Content Producer at FOX61 News. He can be reached at dstewart@fox61.com.
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Doug Stewart is a Senior Digital Content Producer at FOX61 News. He can be reached at dstewart@fox61.com.
Have a story idea or something on your mind you want to share? We want to hear from you! Email us at newstips@fox61.com
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