Invoice Fraud involves a fraudster informing your company that supplier payment details have been changed and providing an alternative detail to fraud your company.

The fraudsters claim to be from your company’s supplier, or they even pose as a member of your own firm. These funds are often quickly transferred so recovering any money from it can be extremely difficult.

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How does invoice fraud happen?

Fraudsters are continuously observing the relationship between companies and their clients or suppliers and will also find the details of when the payments are due. The fraud can only be detected when the actual supplier company follows up on non-payments.
Fraudsters send very convincing letters and emails to companies which makes it very difficult to spot without strong operating processes and controls in place.

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Ways you can prevent invoice fraud :

• Check details of any new payment instructions by using details held on physical file.
• Always follow up on payment requests through a trusted number of the supplier company.
• Before making payments, make sure your invoices quote the full legal name and carefully inspect the invoices.
• Try having only one point of contact with the companies when it comes to frequent transactions.
• Conduct regular Audits on your accounts.
• Ensure that the staff is regularly educated and trained, particularly those that are responsible for making payments.

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Invoice Fraud Case studies

Facebook and Google.

Invoice Fraud is really dangerous and almost impossible to recover.

A Lithuanian man named Evaldas Rimasauskas orchestrated a phishing and invoice scheme which targeted Google and Facebook. From 2013 to 2015 he posed as in employee of Taiwan-based computer manufacturer Quanta Computer and emailed false invoices to Google and Facebook, who paid him a combined amount of $120M over the course of two years. He was eventually caught and extradited to US, where he was charged with wire fraud, money laundering and identity theft.

City official steals $74,000

A former Assistant Director of a municipal office in New Jersey is on trial for fraudulent invoicing the city figures more than $74,000. He allegedly used two fake companies and false names to file documents in 2019.

Invoice Fraud case are difficult to detect at early stages.

Jennifer LaBarge and Polar Rig Specialties

In US, a women named Jennifer LaBarge stole more than $800,000 from family-owned enterprise, Polar Rig Specialties. The scheme went on for many years, in which she gained her employers trust, Labarge used companies QuickBooks Account to pay auto loans, credit card bills and other personal expenses, by changing the details to make it look like standard vendor payments. This fraud damaged the entire company’s reputation and the business was at a total loss of approximately $1 Million.

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In Summary

Invoice frauds can take place in any business, even at a big tech firm. It only takes a determined fraudster with a sophisticated strategy to cut through. Many of these invoice fraud cases can be prevented by implementing a strong corporate regulation and conducting regular Audits on your accounts.

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Please note that this memo is for information purposes only and should not be construed as an advice. It does not necessarily cover every aspect of the
topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.

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