• Manhattan U.S. Attorney Announces Civil Forfeiture Complaint to Recover Proceeds of $100 Million Wire Fraud Scheme

    Author : White Collar Firm May 29, 2016

    Press Release: Manhattan U.S. Attorney Announces Civil Forfeiture Complaint to Recover Proceeds of $100 Million Wire Fraud Scheme

    https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-civil-forfeiture-complaint-recover-proceeds-100-million

    Who: No one. The action is to recover the funds in least 20 bank accounts alleged to be part of a scheme that defrauded a U.S. Company out of $100 million.

    The Vendor Company mentioned in the complaint legitimately worked with the U.S. Company, as well as the Professional Services Company, which the U.S. Company hired to handle vendor payments.

    What: The Manhattan U.S. Attorney in the Southern District of New York filed a Civil Forfeiture Complaint to recover the remaining proceeds of an alleged wire fraud scheme. The funds in question are in at least 20 accounts worldwide, which have been restrained, or frozen, by the respective banks pending the outcome of this complaint.

    A civil forfeiture complaint, unlike a criminal proceeding, is an action against property, not a person. Essentially, the property is the defendant. Law enforcement may elect to file a Civil Forfeiture Complaint in lieu of a criminal proceeding that seeks return of funds through means such as restitution for various reasons, such as lack of jurisdiction, or lack of evidence against a specific person or people.

    Where: The U.S. Company in question conducted business worldwide, and the scheme allegedly occurred in at least 20 bank accounts throughout the world. The Vendor Company is based in Asia.

    When: The incidents allegedly occurred between August 21, 2015, and September 14, 2015. The complaint was filed on April 14, 2016.

    Why: According to the complaint, the perpetrators of this scheme posed as the Vendor Company that the U.S. Company worked with to the Professional Services Company. Through fraudulent communications, the perpetrators had nearly $100 million transferred into an account that was under the control of the perpetrators.

    More than $74 million of these funds have already been returned to the U.S. Company with the help of foreign authorities and banks, and the Manhattan U.S. Attorney seeks to recover the remaining funds.

    How: The alleged perpetrators of this scheme created a phony email account posing as the Vendor Company that the U.S. Company did business with through the Professional Services Company in the past. Using this email account, they were able to convince the Professional Services Company to alter the bank account on file for the Vendor Company to an account at Eurobank Cyprus, Ltd.

    Throughout the course of several weeks and about 16 payments later, nearly $100 million was transferred into this Eurobank account.

    Eurobank Cyprus, Ltd. was not under the control of the Vendor Company, but the alleged perpetrators.

    Almost immediately after the funds were transferred into the Eurobank account, said funds were dispersed into at least 20 more accounts in their control throughout the world. This included accounts in Latvia, Estonia, Hungary, Lithuania, Slovakia, Estonia, and Hong Kong.

    According to authorities, the investigation is ongoing.

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