Europol dismantles 'CEO swindle' gang behind €38m fraud
Seized €5.1 million from bank accounts
Europol has busted a criminal network engaged in France's largest-ever "CEO swindle."
The gang, based out of France and Israel, used business email compromise (BEC) attacks to redirect funds from companies to its own bank accounts.
After a Europe-wide investigation, Europol has detained six people in France and two in Israel. One of them is the group's head, based in Israel.
Police forces from France, Hungary, Croatia, Portugal and Spain worked together on the investigation, which took place over just five days in January.
Europol says the gang used a pre-existing money laundering scheme involving bank accounts in the EU, Israel and China.
The authorities carried out eight home searches as part of the operation, confiscating electronic devices, vehicles and €350,000 in digital assets, as well as bank accounts with a combined value of €5,100,000.
BEC scams like this one usually depend on infiltrating email accounts at the target organisation. The perpetrators use this to monitor communications and pinpoint potential opportunities, such as upcoming payments to contractors.
At the appropriate moment, the fraudsters will dispatch an email using the hacked account and ask the accounting department to make a last-minute alteration to the destination bank account particulars.
In this particular case the scammers made their money by specifically imitating CEOs and other company executives, although that eventually proved their downfall.
The investigation for this operation began in December 2021, when one gang member impersonated the CEO of a metallurgical business based in the north-eastern French province of Haute-Marne.
The fraudster told the company's accountant to transfer €300,000 to a bank in Hungary, which they did. However, the victim realised the fraud a few days later when the scammer requested another €500,000 transfer.
Once the business made a complaint, the investigators discovered that the alleged CEO's call originated from an Israeli number.
But those fees were small fry compared to another operation going on at about the same time, in Paris.
The gang took a different route in its attack against a real estate developer in France's capital city. Here, the suspects pretended to be attorneys working for a legitimate French accounting firm.
After winning the victim's confidence, the scammer demanded an urgent transfer, and eventually convinced the CEO to move millions of euros overseas. They scammed the company of about €38 million in only a few days.
The funds were swiftly moved to a number of European nations, followed by China and finally Israel.
When the real estate firm alerted the police, investigators from across the continent worked with Europol to establish a link between the two cases.
Europol says it enabled the flow of information between the authorities and offered specialised analytical assistance. The different police forces used this assistance to identify accomplices, a modus operandi and funding, as well as the seizure of illegal assets before the suspects could launder them.
The operation comes months after Europol dismantled a similar cyber gang engaged in phishing, scams, fraud and money laundering, which cost citizens millions of euros.
That operation took place in June 2022 and led to the arrest of nine people in the Netherlands and Belgium.
In 2021, more than 800 people were arrested worldwide in an organised crime sting (Operation Trojan Shield) involving the interception of encrypted communications by law enforcement agencies.