10 Suspects Charged for BEC Scams Targeting Federal Funding Programs
Their Scams Lead to the Loss of Over $11.1 Million, According to the U.S. Department of Justice.
Ten people have been charged by the U.S. Department of Justice (DOJ) for their alleged roles in business email compromise (BEC) scams. These scams were aimed at a wide range of victims, including federal funding programs like Medicare and Medicaid.
More than $11.1 million was lost as a result of these attacks, with the money stolen by fooling victims into diverting bank transfers to the scammers’ accounts.
US DOJ claims the attackers spoofed the email addresses of hospitals to request public and private health insurance programs to move to new bank accounts (owned by co-conspirators) and make payments for medical services, leading the targets into thinking the payments were sent to legitimate accounts.
Unwittingly, five state Medicaid programs, two Medicare Administrative Contractors, and two private health insurers allegedly were deceived into making payments to the defendants and their co-conspirators instead of depositing the reimbursement payments into bank accounts belonging to the hospitals.
As Bleeping Computer explains, their schemes allegedly resulted in losses of over $4.7 million to Medicare, Medicaid, and private health insurers in the United States, and over $6.4 million to federal government agencies, private enterprises, and people.
The defendants and their co-conspirators allegedly laundered the proceeds fraudulently obtained from these health care benefit plans and from other victims by, among other things, withdrawing large amounts of cash, layering them through other accounts they or their co-conspirators opened in the names of false and stolen identities and shell companies, transferring them overseas, and purchasing luxury goods and exotic automobiles.
Millions of Americans rely on government health programs like Medicaid and Medicare to meet their medical needs. “These suspects used sophisticated financial schemes, including Business Email Compromise (BEC) and money laundering, to defraud and weaken health care systems across the United States,” stated Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division.
Unfortunately, the most vulnerable members of our society are typically the victims of the subjects’ schemes, added the FBI representative.
The list of suspects and their charges can be found in DOJ’s official press release, available here.
FBI Statistics Show $43 Billion Lost Due to Business Email Compromise (BEC) Scams
In May, The FBI reported that Business Email Compromise (BEC) scams are increasing year after year, with a 65% increase between July 2019 and December 2021. Their statistics also show a total of $43,312,749,946 loss between June 2016 and December 2021.
BEC scammers employ a variety of techniques, including phishing, social engineering, and hacking, to redirect targets’ bank transfers to accounts under their control. And they have a high success rate since they often impersonate someone the victim trusts, such as business colleagues or company executives.