Asset Forfeiture Actions Result in More Than $2.28 Million Returned to Victims of 2 Business Email Compromise Scams

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Robert Fuller, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that, through civil asset forfeiture actions, the government has recovered approximately $2,288,385 for victims of two separate business email compromise scams.

A business email compromise (“BEC”) 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 prior to payment.  By changing the intended beneficiary account, the bad actors commit a business email compromise scam.

In the first scam, criminal actors compromised an email account associated with a member of management team of the City of New Haven’s Board of Education.  In June 2023, these actors created a fake email account that mimicked the email of a bus company that held a contract with the Board of Education for bussing.  The criminal actors used the compromised email address to send test emails between the compromised email address and the newly created fake bus company email address.  Using the fake bus company email address, the criminal actors then were able to change the bus company’s payment information from the real bus company to an account held by the criminal actors, and New Haven sent approximately $5.9 million dollars to the account.  The government successfully seized and forfeited approximately $1,187,691 of the stolen money that was contained in two bank accounts.  When combined with an additional approximately $3.6 million dollars 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’s yearly medical malpractice insurance payment was set to be paid.  Shortly before the due date, the company received a fraudulent email, purportedly from its malpractice insurance company, with new wire instructions.  The company sent approximately $1,652,254 via a wire transfer using the newly provided instructions.  The company discovered the fraud in late May 2023 after it received a payment reminder from its insurance company.  The investigation revealed that the unknown actor 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 and forfeited approximately $1,100,694 remaining in the account, and the company was reimbursed by insurance for the remaining loss.

“These cases demonstrate the U.S. Attorney’s Office’s commitment to helping victims of crime,” said U.S. Attorney Avery.  “Working with our law enforcement partners, we will continue to pursue criminal prosecution of the individuals responsible for these crimes, and by using civil asset forfeiture, we can expeditiously recover as much stolen money as possible and return this money to victims prior to criminal convictions.  Although it can be difficult to come forward and admit that you were a victim of a crime, we stand ready to help you to the fullest extent possible.  The U.S. Attorney’s Office will work with the victims in these cases and with the Department of Justice’s Money Laundering and Asset Recovery Section to properly return the forfeited money to the victims.”

“To avoid becoming the victim of a BEC scheme, verify email addresses are accurate when checking mail on a cellphone or other mobile device before you open any attachments or follow any instructions,” said FBI Special Agent in Charge Fuller.  “Never make any payment changes without verifying with the intended recipient by phone or in person.  If you think you have been a victim of a BEC scheme, immediately contact your bank to request a recall or reversal as well as a Hold Harmless Letter or Letter of Indemnity, and file a detailed complaint with the Internet Crime Complaint Center at www.ic3.gov.”

The Internet Crime Complaint Center, is run by the FBI and serves as the country’s hub for reporting cybercrime.  Visit www.ic3.gov to report a crime, and for updated information regarding BEC trends and other cyber fraud schemes.

These cases are being investigated by Federal Bureau of Investigation and the U.S. Marshals Service, and prosecuted by Assistant U.S. Attorney David C. Nelson.