Businesses advised to take steps to help prevent CEO fraud

Lethbridge Police are warning local businesses to be aware of “CEO frauds” and ensure checks and balances are in place to prevent being victimized.

The CEO scam involves fraudsters who send an email impersonating the CEO, CFO, manager, or other person in authority’s email address to request the wire transfer of funds to a third party. The “spoofed” email looks as if it came from the real executive and often includes language that makes the request sound urgent and highly confidential. Scammers research companies and their senior executives and register email domains that look very similar to the target domain. For example, @XYZcompany1.ca instead of the real domain XYZcompany.ca. Upon receipt of the official-looking email, an unsuspecting employee complies with the request and transfers the money. Once the fraud is detected the money is usually long gone.

In August 2019 the City of Saskatoon was victimized in this scam and lost more than $1 million. Locally, LPS is aware of two significant CEO frauds where large corporations have fallen victim to this scam. In one such case a local public institution suffered a loss of $350,000.

To reduce the risk of being victimized, police are advising businesses to educate their employees about the scam and be skeptical about financial requests made by email. Staff should be encouraged to communicate with their manager or supervisor if they feel a request is unusual or suspicious. If employees have any doubts about an email that looks legitimate, they should contact the sender directly by phone or in person before responding in order to confirm its authenticity. It’s also recommended that businesses have policies and controls in place requiring more than one person to approve fund transfers.

 

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Media inquiries may be directed to:

A/Sgt. Paolo Magliocco
Economic Crimes Unit

Lethbridge Police Service
403-330-5092
paolo.magliocco@lethbridgepolice.ca