Police have arrested 1,003 people in 20 countries in recent months as part of an operation led by INTERPOL to tackle online financial crime, including “business email compromise” (BEC).
Law enforcement agencies in 20 countries made the arrests between June and September for various forms of online fraud such as romance scams, investment fraud and money laundering associated with online gambling. Some 2,350 bank accounts were blocked as part of INTERPOL’S HAECHI-II operation.
According to sources from the INTERPOL investigation, far from the common notion of online fraud as a relatively low-level type of criminality, the results of Operation HAECHI-II show that transnational organised crime groups have been using the Internet to extract millions of dollars from their victims before funnelling the illicit cash to bank accounts across the globe.
The operation specifically targeted BEC, which involves tricking employees into sending large sums of money to supposed suppliers or contractors, often using emails that appear to be sent by someone in a position of responsibility within the organisation.
The FBI estimates that business email compromise cost US companies USD 1.8 billion in 2020, dwarfing the USD 29 million lost to ransomware scams. The fraudsters have also adopted a part of the ransomware business and switched to a service-based model where the components are rented to different parties.
INTERPOL highlighted a case in Colombia, where a textile company found itself defrauded of more than USD 8 million by a business email compromise scam. The perpetrators impersonated the legal representative of the company, giving the order to transfer more than USD 16 million to two Chinese bank accounts. Half of the money was transferred before the company uncovered the fraud and alerted the Colombian judicial authorities, which in turn quickly contacted INTERPOL’s financial crime unit through their National Central Bureau in Bogotá.
INTERPOL worked through its offices in Beijing, Bogotá and Hong Kong to freeze the transferred funds. Intercepting the illicit proceeds of online financial crimes before they disappear into the pockets of money mules is a race against time.
BEC is an international banking problem that is difficult for law enforcement to deal with in all jurisdictions. The FBI set up the Recovery Asset Team (RAT) in February 2018 to manage communications between banks and FBI field offices in order to freeze funds in cases where victims have transferred money to national accounts. It has also worked with US consulates in foreign territories, such as Hong Kong, to freeze multimillion-dollar transfers to bank accounts in China.
Interpol points out that, in another case, a company in Slovenia was duped into transferring more than USD 800,000 to money mule accounts in China. The transfer was intercepted after the Slovenian Police contacted Interpol and were able to connect with its colleagues in Beijing.
Operation HAECHI-II involved the police forces of Angola, Brunei, Cambodia, Colombia, China, India, Indonesia, Ireland, Japan, Korea, Laos, Malaysia, Maldives, Philippines, Romania, Singapore, Slovenia, Spain, Thailand, and Vietnam.