Online Fraud Suspect Arrested

Monday, August 1, 2016 @ 02:08 PM gHale


A person believed to be behind an international criminal network involving online frauds is under arrest after a joint operation by INTERPOL and the Nigerian Economic and Financial Crime Commission (EFCC).

The 40-year-old Nigerian national, known as “Mike,”ended up arrested and is facing charges involving scams over $60 million affecting hundreds of victims on a global basis. In one case a target was conned into paying out $15.4 million, officials said.

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The network compromised email accounts of small to medium businesses around the world including in Australia, Canada, India, Malaysia, Romania, South Africa, Thailand and the U.S., with the financial victims mainly other companies dealing with these compromised accounts.

Heading a network of at least 40 individuals across Nigeria, Malaysia and South Africa which provided malware and carried out the frauds, the suspect also had money laundering contacts in China, Europe and the U.S who provided bank account details for the cash flow, officials said.

Following his arrest in Port Harcourt in southern Nigeria, a forensic examination of devices seized by the EFCC showed he had been involved in a range of criminal activities including business e-mail compromise (BEC) and romance scams.

The main two types of scam run by the 40-year-old targeted businesses were payment diversion fraud – where a supplier’s email would end up compromised and fake messages would then go to the buyer with instructions for payment to a bank account under the criminal’s control – and “CEO fraud”.

In CEO fraud, the email account of a high-level executive ends up compromised and a request for a wire transfer goes out to another employee who has been identified as responsible for handling these requests. The money is then paid into a designated bank account held by the criminal.

The suspect first came onto the law enforcement radar through a report provided to INTERPOL by Trend Micro, one of its strategic partners at the INTERPOL Global Complex for Innovation (IGCI) in Singapore. This, combined with actionable analysis and intelligence from Fortinet Fortiguard Labs in 2015, enabled specialists at the INTERPOL Digital Crime Centre, including experts from Cyber Defense Institute based at the IGCI, and the EFCC to locate the suspect in Nigeria, resulting in his arrest in June.

Noboru Nakatani, Executive Director of the IGCI warned BEC poses a significant and growing threat, with tens of thousands of companies victimized in recent years.

“The public, and especially businesses, need to be alert to this type of cyber-enabled fraud,” Nakatani said. “Basic security protocols such as two-factor authentication and verification by other means before making a money transfer are essential to reduce the risk of falling victim to these scams.”

The 40-year-old, along with a 38-year-old also arrested by Nigerian authorities, face charges including hacking, conspiracy and obtaining money under false pretenses. Both are currently on administrative bail as the investigation continues.