FBI warns of China-related wire transfer fraud

Small and medium-size businesses in the U.S. lost more than $11 million over the past year in online scams in which stolen banking credentials were used in fraudulent wire transfers to companies in China, the FBI said.There were 20 such incidents between March 2010 and April 2011, affecting companies and public institutions in the U.S. that tend to have accounts at local community banks and credit unions, some of which use third-party service providers for online banking services, according to the agency. The amounts transferred at any one time ranged from tens of thousands of dollars to nearly $1 million.
http://news.cnet.com/8301-27080_3-20057978-245.htmlAlso see:Fraud Alert Involving Unauthorized Wire Transfers to China [news release]
The FBI has observed a trend in which cyber criminals — using the compromised online banking credentials of U.S. businesses — sent unauthorized wire transfers to Chinese economic and trade companies located near the Russian border.Between March 2010 and April 2011, the FBI identified twenty incidents in which the online banking credentials of small-to-medium sized U.S. businesses were compromised and used to initiate wire transfers to Chinese economic and trade companies. As of April 2011, the total attempted fraud amounts to approximately $20 million; the actual victim losses are $11 million.In a typical scenario, the computer of a person within a company who can initiate funds transfers on behalf of the U.S. business is compromised by either a phishing e-mail or by visiting a malicious Web site. The malware harvests the user’s corporate online banking credentials. When the authorized user attempts to log in to the user’s bank Web site, the user is typically redirected to another Web page stating the bank Web site is under maintenance or is unable to access the accounts. While the user is experiencing logon issues, malicious actors initiate the unauthorized transfers to commercial accounts held at intermediary banks typically located in New York. Account funds are then transferred to the Chinese economic and trade company bank account.VictimsLike most account takeover fraud, the victims tend to be small-to-medium sized businesses and public institutions that have accounts at local community banks and credit unions, some of which use third-party service providers for online banking services.RecipientsThe intended recipients of the international wire transfers are economic and trade companies located in the Heilongjiang province in the People’s Republic of China. The companies are registered in port cities that are located near the Russia-China border.The FBI has identified multiple companies that were used for more than one unauthorized wire transfer. However, in these cases the transfers were a few days apart and never used again. Generally, the malicious actors use different companies to receive the transfers. The companies used for this fraud include the name of a Chinese port city in their official name. These cities include: Raohe, Fuyuan, Jixi City, Xunke, Tongjiang, and Dongning. The official name of the companies also include the words “economic and trade,” “trade,” and “LTD.”The economic and trade companies appear to be registered as legitimate businesses and typically hold bank accounts with the Agricultural Bank of China, the Industrial and Commercial Bank of China, and the Bank of China.At this time, it is unknown who is behind these unauthorized transfers, if the Chinese accounts were the final transfer destination or if the funds were transferred elsewhere, or why the legitimate companies received the unauthorized funds. Money transfers to companies that contain these described characteristics should be closely scrutinized.Unauthorized Wire TransfersThe unauthorized wire transfers range from $50,000 to $985,000. In most cases, they tend to be above $900,000, but the malicious actors have been more successful in receiving the funds when the unauthorized wire transfers were under $500,000. When the transfers went through successfully, the money was immediately withdrawn from or transferred out of the recipients’ accounts.In addition to the large wire transfers, the malicious actors also sent domestic ACH and wire transfers to money mules in the United States within minutes of conducting the overseas transfers. The domestic wire transfers range from $200 to $200,000. The intended recipients are money mules, individuals who the victim company has done business with in the past, and in one instance, a utility company located in another U.S. state. The additional ACH transfers initiated using compromised accounts range from $222,500 to $1,275,000.MalwareThe type of malware has not been determined in every case but some of the cases involve ZeuS, Backdoor.bot, and Spybot. In addition, one victim reported that the hard drive of the compromised computer
http://www.ic3.gov/media/2011/ChinaWireTransferFraudAlert.pdf