United States: Phishing For Corporate Dollars: The Emerging Global Threat Posed By Spear Phishing And Business Email Compromise

In August 2015, the FBI issued an alert describing the newest form of cyberattack葉he Business Email Compromise ("BEC").i BEC is a sophisticated mutation of the now-common spear phishing data breach technique.ii In a BEC scam, a hacker often impersonates a high-ranking corporate executive and sends a "spoofed" emailiii to a carefully selected target who generally has access and authority to transfer large sums of money on behalf of the company. Unlike traditional phishing schemes, BEC scams are well researched. Successful hackers troll the social media sites of the target employee, review corporate web pages for contact information, and read professional writings to better understand the corporate culture as well as the individual characteristics of the target employee, all with the goal of convincing that employee to part with the company's cash. Consider the following three scenarios (all based on actual cases reported to the FBI):

  • A corporate accountant receives a spoofed email that appears to be from the CEO of the company requesting an urgent wire transfer relating to a top secret acquisition. The email contains instructions to wire corporate funds to a new bank account of a known business partner at an offshore bank. The accountant, wishing to appear responsive to her boss, drops everything and wires the funds immediately. By the time the accountant and CEO speak in person and realize the error, the money is long gone from the fraudulently opened offshore bank account.iv
  • A business receives a fraudulent invoice from what appears to be a longstanding supplier requesting that the next payment be sent via wire to an alternate account. The spoofed email contains a PDF file of an invoice that appears to be from the trusted supplier, and the email text and header information appear to contain the hallmarks of an actual business communication from the supplier. Because the supplier is located overseas and in a different time zone, it is common practice that communication about payment of invoices be done electronically, rather than verbally. The unsuspecting business wires the funds to the new account, and the money disappears almost immediately. Weeks later, the supplier follows up with the business, sending an angry email expressing frustration that the funds were not timely sent. When the two business partners realize the mix-up, it is too late to recover the funds.v
  • An employee's hacked personal email account sends fraudulent invoices to a number of vendors requesting immediate payment to phony company bank accounts. The hacker has researched the vendor relationships and knows that several of the invoices are overdue. As a result, the scheme uses social engineering預 form of manipulation and trickery based on the human tendency to obey orders葉o influence the actions of the vendors by inserting a sense of urgency ("Please send payment immediately, or future deliveries will be cut off!"). Many of the vendors quickly comply for fear of having their supplies embargoed. The result is a windfall to the hacker and a loss to both the vendors and the victim company.vi

Although the factual scenarios vary, the general BEC scheme follows a very specific pattern:

Taking the Bait: How Hackers Gain Access

In the first generation of phishing schemes, most attacks relied on a combination of fraudulent emails with links to bogus websites to obtain internet users' information.vii In recent years, however, cybercriminals have refined their methods and increased the amount of research performed on each target so as to maximize the return on each cyber attack. Whereas a traditional phishing attack may have blanketed an entire database of email addresses, new spear phishing schemes target specific individuals within specific organizations.viii

A BEC scam, therefore, usually begins in one of two ways: (i) by getting an unsuspecting employee to click on an email attachment that compromises the network (i.e., malware); or (ii) by spoofing an email of a high-ranking official in the company. Spear phishers, however, usually research their target and the company as a whole in order to craft highly convincing emails. The telltale signs of scam emails用oor grammar, suspicious requests, and uncharacteristic language謡on't give the BEC scammer away. By mining corporate webpages and social networks, for example, the personalization and impersonations used in the spear phishing emails can be extremely accurate and compelling. Because the email appears to come from a known and trusted source, the request to release valuable data or to take urgent action appears more plausible. Thus, hackers actually employ low-tech tactics to achieve high-dollar corporate fraud.

Hook, Line and Sinker: Using Trust, Urgency, and Social Engineering to Commit Financial Fraud

The metaphoric "spear" in spear phishing is the email itself, received by a carefully selected yet unsuspecting employee. The email looks official, appears to come from a high-ranking corporate executive, and generally contains attachments on company letterhead directing the target employee to wire corporate funds to a particular person (usually a trusted vendor contact) at an overseas bank. But before the hacker ever spoofs the email account of the high-ranking corporate executive or drafts the text of the email, the attacker does a significant amount of legwork.

  • In many cases, the hacker has gained access to the corporate email server and may have access to the high-ranking executive's calendar. As a result, the hacker knows to send the email when the executive is traveling or otherwise out of the office (and unavailable for verbal confirmation before the wire transfer is made).
  • The hacker has also likely researched用erhaps extraordinarily carefully葉he target employee and possibly compromised his or her email account as well as that of someone in the accounting department. The amount of money requested in the fraudulent transfer is carefully tailored to be within the expected range of the payments capable of being authorized by the target employee. The language of the request mimics past email requests; uses similar vocabulary; pertains to goods, services, or business partners with whom the company normally deals; and is requested in accordance with usual payment schedules.
  • In some cases, the email will identify or even cc an employee in the accounting department to give an added sense of authenticity. Although the email address of the target employee is accurate, all others cc'd on the email chain will have slightly modified email addresses (at times the emails are modified so slightly that the change is undetectable), so that only the hackers are receiving the messages. For example, Accounting@CompanyABDC.com instead of Accounting@CompanyABCD.com.
  • In another scenario, a hacker may compromise and monitor the email account of someone who receives invoices from vendors or suppliers. The hacker then modifies a legitimate invoice to reroute payment to a new bank account number or address. The hacker doesn't need to compromise the vendor's system; a spoof email from John@Vendorcorp.com instead of John@Vendorco.com including the fraudulent invoice is enough to accomplish the goal.
  • Hackers often use social engineering to trick their victims into acting quickly. Thus, the hacker may insert a false sense of urgency into the text of the email to spur the target employee to wire the funds while the executive is out of the office. In other cases, the hacker may convince the target that the financial transaction relates to a secret business acquisition or a merger, thereby encouraging the target not to disclose the transfer of funds to others. Both tactics are designed to manipulate the target by portraying the orders as coming from an authority figure.

Unfortunately, the hacker's research efforts are often successful. Recent examples demonstrate that companies of all sizes in all sectors are at risk. Over the past several months, many have fallen victim to similar schemes, losing millions of dollars.ix

Once the target wires the money, the hackers work to quickly transfer the funds from the overseas bank account before the company discovers the breach.

Removing the Hook: Conducting an Internal Investigation after a BEC Attack is Discovered

Discovering a data breach within your organization can be alarming, especially in the early hours and days when it is impossible to ascertain the full extent of the damage to corporate systems and reputation. At the outset, there are a number of operational, legal, and strategic questions the company's in-house legal team should explore:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Shireen M. Becker
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you致e read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq痴 use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor痴 own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq痴 Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq痴 Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq痴 right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions