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Indiana Department of Insurance Wire Fraud Prevention

Indiana Department of Insurance Wire Fraud Prevention

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Indiana Department of Insurance Wire Fraud Prevention

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  1. Indiana Department of Insurance Wire Fraud Prevention Presented by Jonathan Handsborough, Title Division Director

  2. Wire Fraud is the Fastest Growing Real Estate Cybercrime in the U.S. According to the FBI, the Internet Crime Complaint Center saw a 480 percent increase in the number of complaints filed last year by those in the real estate industry. Most of these complaints were related to wire fraud, a scam becoming more common in the real estate industry. In fact, earlier this month, the FBI told the Washington Post that in 2017, cyber criminals stole or attempted to steal almost $1 billion from real estate purchase transactions. Source: Federal Bureau of Investigations. Business E-Mail Compromise E-Mail Account Compromise The 5 Billion Dollar Scam. May 4, 2017 Alert Number I-050417

  3. Business E-mail CompromiseE-mail Account Compromise May 04, 2017 Alert Number I-050417-PSA Questions regarding this PSA should be directed to your local FBI Field Office. Local Field Office Locations: www.fbi.gov/contact-us/field This Public Service Announcement (PSA) is an update to Business E-mail Compromise (BEC) PSAs 1-012215-PSA, 1-082715a-PSA and I-061416-PSA, all of which are posted on www.ic3.gov. This PSA includes new Internet Crime Complaint Center (IC3) complaint information and updated statistical data as of December 31, 2016. DEFINITIONBusiness E-mail Compromise (BEC) is defined as a sophisticated scam targeting businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments. The E-mail Account Compromise (EAC) component of BEC targets individuals that perform wire transfer payments. The techniques used in the BEC/EAC scam have become increasingly similar, prompting the IC3 to begin tracking these scams as a single crime type in 2017. Source: Federal Bureau of Investigations. Business E-Mail Compromise E-Mail Account Compromise The 5 Billion Dollar Scam. May 4, 2017 Alert Number I-050417

  4. The scam is carried out when a subject compromises legitimate business e-mail accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds. Most victims report using wire transfers as a common method of transferring funds for business purposes; however, some victims report using checks as a common method of payment. The fraudsters will use the method most commonly associated with their victim’s normal business practices. The scam has evolved to include the compromising of legitimate business e-mail accounts and requesting Personally Identifiable Information (PII) or Wage and Tax Statement (W-2) forms for employees, and may not always be associated with a request for transfer of funds. BACKGROUNDThe victims of the BEC/EAC scam range from small businesses to large corporations. The victims continue to deal in a wide variety of goods and services, indicating that no specific sector is targeted more than another. It is largely unknown how victims are selected; however, the subjects monitor and study their selected victims using social engineering techniques prior to initiating the BEC scam. The subjects are able to accurately identify the individuals and protocols necessary to perform wire transfers within a specific business environment. Victims may also first receive “phishing” e-mails requesting additional details regarding the business or individual being targeted (name, travel dates, etc.).

  5. Some individuals reported being a victim of various Scareware or Ransomware cyber intrusions immediately preceding a BEC incident. These intrusions can initially be facilitated through a phishing scam in which a victim receives an e-mail from a seemingly legitimate source that contains a malicious link. The victim clicks on the link, and it downloads malware, allowing the subject(s) unfettered access to the victim’s data, including passwords or financial account information. The BEC/EAC scam is linked to other forms of fraud, including but not limited to: romance, lottery, employment, and rental scams. The victims of these scams are usually U.S. based and may be recruited as unwitting money mules. The mules receive the fraudulent funds in their personal accounts and are then directed by the subject to quickly transfer the funds to another bank account, usually outside the U.S., upon direction, mules may open bank accounts and/or shell corporations to further the fraud scheme.

  6. Source: Federal Bureau of Investigations. Business E-Male Compromise Timeline. fbi.gov/news/stories/business-e-mail-compromise-on-the-rise.

  7. From 2013 through September 6, 2016, there have been approximately 22,000 reported cases of email compromise fraud, involving $3.1 billon. • In the fiscal year 2017 $969 million was diverted or attempted to be diverted from real estate purchases transactions and wired to criminally controlled accounts. • That figure is up explosively from fiscal 2016, when the FBI counted $19 million in wire-transfer frauds affecting home buyers. Source: United States Department of Treasury. Financial Crimes Enforcement Network. Wwwfince.gov/resources/advisories/finen-advisory-fin-2016.

  8. Wire Fraud Email Scam Examples

  9. Wire Fraud Red Flags • Below are some wire transfer red flags to be shared with employees to help prevent fraud from impacting your organization: • Urgency or secrecy for sending wire, especially on Friday. • Email account resembling another customer’s email account • Change in wire instructions • Foreign Bank • Details contain multiple countries and/or include multiple currency exchanges • Emailed instructions marked as “immediate”, “urgent”, or “high importance” • Purpose of payment is inconsistent with wire details. • Wording that is grammatically incorrect, misspellings, or odd wording. • Payment or contact information changes Source: American Land Title Association - NYCU News You Can Use alta.org/email/news/NYCU180301, Offices of United States Attorneys - Elements of Wire Fraud justice.gov/usam/criminal-resource-manual-941, Daniel P. Fowler - Near North Title Group LLC Policies and Procedures Wire Fraud Prevention, State of Illinois Department of Financial & Professional Regulations – Cyber Security Conference

  10. Red Flags Cont. • Be aware of automatic updates when using “free” email platforms and public WiFi • Anti-virus software updates back to back or name change • Auto Data Backup and Pop-Ups • Password auto changes or lock-outs • They insists on communicating via email only. • The return email or return phone number is incorrect • Outgoing wire transfers requested by non-account holders of a bank. • Hyperlinked text in body of email. • Time email was sent • Do you have an uncomfortable gut feeling Source: American Land Title Association - NYCU News You Can Use alta.org/email/news/NYCU180301, Offices of United States Attorneys - Elements of Wire Fraud justice.gov/usam/criminal-resource-manual-941, Daniel P. Fowler - Near North Title Group LLC Policies and Procedures Wire Fraud Prevention, State of Illinois Department of Financial & Professional Regulations – Cyber Security Conference

  11. Best Practice Solutions • Pick-up the phone: Never release funds without verbal communication (trusted number). Ask questions: Engage your client • Limit online activity and social media accounts when closing transactions. • Do not use the same password. (I.e. LinkedIn, Twitter, Facebook, your office.) Strong passwords are critical. Never share passwords • Encryption of everything. Password/ PIN protect everything. Change Password/PIN often. • Utilize wire templates when possible. Educate clients on templates. • Utilize email footnote warnings with a message to CALL you for inconsistencies. • Train employees to spot red-flags. • Download or install apps from trusted sources only Source: American Land Title Association - NYCU News You Can Use alta.org/email/news/NYCU180301, Offices of United States Attorneys - Elements of Wire Fraud justice.gov/usam/criminal-resource-manual-941, Daniel P. Fowler - Near North Title Group LLC Policies and Procedures Wire Fraud Prevention, State of Illinois Department of Financial & Professional Regulations – Cyber Security Conference

  12. Best Practice Solutions Continued • Use remote device wipes • Update anti-virus and anti-malware. Keep current • Don’t click links or URLs you don’t recognize. Don’t download attachments you don’t recognize. • Check sender’s display name when checking the legitimacy of emails. Utilize email alerts • Document date and time of the wire transfer call on the wiring instructions • Document person name who verified wire transfer on the instructions • Use www.alta.gov (Phishing-for-Wire-Transfers) signature line examples. • Report criminal complaints regarding Internet wire-fraud transfer crime to IC3. Source: American Land Title Association - NYCU News You Can Use alta.org/email/news/NYCU180301, Offices of United States Attorneys - Elements of Wire Fraud justice.gov/usam/criminal-resource-manual-941, Daniel P. Fowler - Near North Title Group LLC Policies and Procedures Wire Fraud Prevention, State of Illinois Department of Financial & Professional Regulations – Cyber Security Conference

  13. Special Thanks • Daniel P. Fowler - Near North Title Group LLC • Indiana Mortgage Lending and Fraud Prevention Task Force • Indiana Land Title Association • American Land Title Association • State of Illinois Department of Financial & Professional Regulations • Federal Bureau of Investigations • NYCU News • Offices of United States Attorneys • United States Department of Treasury • Financial Crimes Enforcement Network.

  14. Thank You