CEO Fraud Gang busted by Police
A joint police investigation supported by Europol has led to the dismantling of a Franco-Israeli criminal network involved in large-scale CEO fraud (also known as BEC Fraud). The criminal network successfully targeted two companies located in France and stole around €38 million:
- In early December 2021, one of the suspects impersonated the CEO of a company specialised in metallurgy. The fraudster asked the company’s accountant to make an urgent and confidential transfer of €300,000 to a bank in Hungary. The fraud was discovered a few days later when the accountant, thinking he was acting on behalf of the company’s CEO, attempted to make a transfer of €500,000. The company filed a complaint, and the investigators subsequently found that the call from the alleged CEO came from a number in Israel.
- In late December 2021, a real estate developer also felt victim to fraud with a similar modus operandi. The damages were much more significant in this case, however. To perpetrate the fraud, the suspects impersonated lawyers, saying they worked for a well-known French accounting company. After gaining the victim’s trust, the fraudster requested a large, urgent and confidential transfer. Pretending to be consultants, they persuaded the Chief Financial Officer (CFO) to transfer millions of euros abroad. In total, they defrauded the company of almost €38 million in a matter of days. Using a pre-existing money laundering scheme, these funds were quickly transferred to different European countries, then to China and finally to Israel.
- A link between these two scams was established in January 2022 when the Parisian real estate company filed a complaint. The information exchange and international cooperation facilitated by Europol led to the discovery of accomplices, modi operandi and funds.
The successful operation, led by France, resulted in five action days, which took place between January 2022 and January 2023 in France and Israel. Also involved were the Croatian National Police, the Croatian Anti Money Laundering Office, the French National Police, the French Gendarmerie, the Hungarian Budapest Metropolitan Police, the Israel Police, the Portuguese Judicial Police and the Spanish National Police.
A total of 8 suspects were arrested, 6 in France and two in Israel (including the criminal mastermind) and total assets estimated at €5.5 million were seized.
Europol facilitated the exchange of information and provided specialised analytical support, including financial and cryptocurrency analysis and expertise. The analysis led to the identification of links between countries to enable the urgent seizure of the criminal assets before the suspects could launder them.
The EAST Expert Group on Payment and Transaction Fraud (EPTF) focuses on the security of payments and transactions and covers the prevention of CEO Fraud within its brief. The 14th EAST EPTF meeting took place on 9 November 2022.
