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Largest fraud in the country cost Americans $1.8 billion in 2020, FBI says

Business email compromise is complex, convincing fraud
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Posted at 6:31 AM, Nov 08, 2021

Brendan Henkel, his wife and three children had already begun transforming their new Davenport house into a home. Then, the unthinkable happened.

The seller, Open Door, had allowed the Henkel’s to move in weeks before their closing date. But days before they would sign the papers and take ownership, Henkel received an email with a closing disclosure and wiring instructions.

The instructions included the title company's logo, email signature and the name of the employee he had been dealing with. Henkel found out 20 minutes too late that the email and wire transfer directions were fakes.

“I transferred the money to Wells Fargo then I left, and I called the title company,” Henkel said. “They told me that they had not essentially asked for anything. They said, go back to the bank immediately."

By then the family’s life savings — the $49,400 needed to close on the new house — was gone.

“It literally felt like someone had snatched my lungs out, like I couldn't, I could not breathe,” Henkel said.

FBI Special Agent Andy Sekela said what happened to the Henkel’s is known as the “business email compromise,” a crime that has robbed central Florida consumers of more than $124 million in 2020. It involves hackers impersonating legitimate companies and tricking consumers into wiring money to a thief.

It's not just home buyers losing money to the scam. According to the FBI’s annual fraud report, the agency fielded more than 19,000 complaints involving email compromise scams.

Entertainer Jeff Sherer lost a fortune after receiving an email on the automatic renewal of his anti-virus software.

“They said they were going to automatically bill me unless I canceled,” Sherer said.

The fraudsters then sent him an online refund form which he filled out. Later, the thief notified him that there’d been an error on the form causing the company to mistakenly deposit $35,000 into his checking account. The hackers even sent a screenshot of what appeared to be his account reflecting the additional $35,000 in his balance.

Sherer had no idea the emails and screenshots were fake until after he wired the thief $35,000, in an effort to "return" the money.

“I didn’t sleep for weeks after that…I didn’t sleep for weeks,” Sherer said.

The victims in both cases said no one, not the realtor, not the title company, not even the banks warned them about the dangers of wiring money without using a two-factor authentication such as getting a phone call or using a password from a legitimate party.

Special Agent Sekela said companies that deal in wire transfers involving customers should be educating consumers about this fraud.

“We absolutely encourage businesses to share that information because that is our best line of defense,” Sekela said.

In Henkel's case, his family had to borrow $50,000 in order to keep their new home. A GoFundMe page has been set up for them.

If you’re a victim of a cybercrime, you can report it to the FBI at www.ic3.gov.