Page 14 - Internal Auditor M.E. - June 2019

Fraud risk

By: Muhammad Jallad

Financial Fraud through Money

Transfers

In the last few years, there have been multiple reports of of the Indian company was patel_dv@ongc.co.in while the
frauds committed by various entities towards companies and fraudsters email address is patel_dv@ognc.co.in.
major establishments. These frauds aimed at stealing money
by requesting them to transfer some due amounts to certain The above represents recent cases of fraud targeted particular
accounts. The latest news were published in March 2018 personnel in companies to transfer funds to fake accounts.
reporting that the football club S.S. Lazio had been duped by Many companies have made this mistake; some have lost their
an online scammer, which had cost the Italian club 2 million money while others are still trying to recover whatever they
Euros sent to unknown individuals claimed to be officials of can recover.
Dutch club Feyenoord. There is no doubt that some fraudsters are making every
The final installment from Feyenoord’s sale of Dutch defender effort to convince the other party to transfer the due
Stefan de Vrij to S.S. Lazio in 2014 was due to the parent amounts to their accounts; these efforts include forgery of
club by the end of the season in May of this year. Lazio has official signatures, sending certified letters on the company’s
transferred 2 million Euros to the account, but were surprised letterheads, creating e-mail addresses very similar to the
by Feyenoord officials’ assertion that the Dutch club had not company with minor differences, in order to convince the
received any funds. They also denied their knowledge of the other party to convert thousands, if not millions of dollars.
email that had reached S.S. Lazio via the fake email address. Therefore, we find that there are several ways used by
Another incident took place in October 2015, when the fraudsters to deceive various parties to transfer due amounts
“Indian Express” newspaper reported that an India Oil and to fake accounts where these fraudsters end up stealing these
Natural Gas Company had lost around 1.970 billion rupees in amounts and disappear, making it difficult to track them.
one of biggest online frauds in Mumbai. There are many procedures and steps to be followed by
The report mentioned that the loss was caused by spoofing different departments in companies to avoid the occurrence
the e-mail of the Indian company, with minor modifications, of such errors, which will be discussed below:
used to persuade Saudi ARAMCO to transfer funds to the 1- Verbal confirmation
fraudsters account instead of the legitimate banking account
of the Indian company. Always make sure to confirm verbally with the relevant
parties in your company before you make the payment.
Fraudsters said they depended on the Saudi company not For example, confirm with the procurement department
noticing the slight change in the Indian company’s e-mail that the supplier is entitled to this payment and that his/
address.
her banking account information and communication
The “Express” reported also that the original email address information are correct.

14 INTERNAL AUDITOR - MIDDLE EAST JUNE 2019