U.S. Attorney’s Office Uses Civil Forfeiture to Recover $18,500 for Fraud Victim

Jackson, Miss. – On September 28, 2023, U.S. District Judge Sul Ozerden entered a Final Judgment of Forfeiture against $18,500.00 in U.S. Currency seized in the form of a cashier check from one of the co-conspirators of a fraud scheme, announced U.S. Attorney Todd Gee.  The funds will be returned to the victim of the scheme.

According to the Verified Complaint for Forfeiture in Rem filed by the U.S. Attorney’s Office, the co-conspirator was engaged in a business email compromise scheme (BEC) to receive fraud proceeds. A BEC is a sophisticated scam, often targeting businesses and individuals involved in wire transfer payments.  The fraud is carried out by compromising and/or “spoofing” legitimate business email accounts through social engineering or computer intrusion techniques.  It causes employees of the victim company (or other individuals involved in legitimate business transactions with them) to transfer funds to accounts the scammers control.

The complaint was filed on June 12, alleging that on September 25, 2020, the victim received an email appearing to be from his attorney, giving him wiring instructions needed to close on a real estate transaction.  The fraudulent email instructed the victim to send the funds via wire transfer to a bank account set up by a co-conspirator.  Following the fraudulent instructions, the victim wired approximately $142,834.80 to the account.

After an investigation, the Government seized $18,500 in the form of a cashier check that had been issued to the co-conspirator in a fictitious name.  After the complaint was filed in federal court, the victim filed a claim and answer in the civil forfeiture proceeding, explaining that he had been the victim of the fraud scheme.  The U.S. Attorney’s Office entered into a Stipulated Settlement Agreement with the victim and asked the Court to enter a Final Judgment ordering the return of the $18,500.00 to the victim and canceling the interests of any other person or entity.

On January 29, 2021, in the Southern District of Texas, the United States filed a civil forfeiture action (United States v. $142,869.20 in U.S. Currency, 4:21-cv-306) against the funds then remaining in the co-conspirator’s account, of which $86,671.93 remained after the account was frozen.  The United States won a default judgment, and the funds have since been returned to the victim.

The Federal Bureau of Investigation conducted the investigation. In the Southern District of Mississippi, the USAO Asset Recovery Unit team, led by AUSA Clay B. Baldwin handled the matter. 

Business Email Compromise schemes can be prevented. Here are some tips:

• Independently obtain mortgage payoff statements and confirm with verified and trusted sources.

• Independently verify the authenticity of information included in correspondence and statements.

• Enable Multi-Factor Authentication (MFA) on all email accounts.

• Routinely change passwords.

• Routinely monitor email account access, check for unauthorized email rules and forwarding settings.

• Restrict wire transfers to known and previously verified accounts.

• Pay using checks when the information cannot be independently verified.

• Have a clear and detailed Incident Response Plan.

For more information visit the Secret Service’s Preparing for a Cyber Incident page. To learn more about the Secret Service and efforts to combat Business Email Compromise fraud, please click here.