Efficient Services Escrow Group Lays off Entire Staff after $1.5m Fraud
It has surfaced that Efficient Services Escrow Group, based in Irvine California had $1.5 million drained from its bank accounts with First Foundation Bank. The fraud went unnoticed and has lead to the firm having to layoff its entire staff.
Three wire transfers were initiated to between December 2012 and January 2013 to accounts in Russia and China, however these remained unnoticed until late February.
This is an extreme example the devastating effects of Account Takeover Fraud. It is unclear exactly how the fraud played out, but it is unusual for fund to be moved, undetected so blatantly.
On February 28th, a full 6 days after a $1.5m loss, the California Department of Corporation stepped in and froze the company’s accounts.
Questions still remain as to who should bear responsibility for this crime. Was Efficient Services Escrow Group a target of a phishing scam they should have mitigated against? Did First Foundation Bank have the correct systems in place to lookout for unauthorised activity and prevent this kind of account takeover, before fund had been removed?
It is reported by Brian Krebs of Krebs on Security that originally, the bank believed the fraud to be an act of employee embezzlement, as opposed to cybercrime. This further points to the possibility of a phishing enabled account takeover attack.
Credit to Krebs on Security for bringing this to our attention.
Related Articles: How Account Takeover is the tip of the cyberthreat iceberg, Account Takeover Fraud
