Payment fraud – Leoni case
| 30-08-2016 | Udo Rademakers |
At the 5th of August I wrote an article regarding payment fraud. Not even two weeks later, Leoni, an automotive company in Germany with EUR 4.5b turnover, has been the victim of massive fraud where USD 40m has been wired … to a crime organization. “Leoni realized it had become the victim of fraudulent activity with the help of falsified documents and identities and the use of electronic communication channels,” the firm said. (source: dw.com)
Most probably, this has been done via the so called “Fake President Fraud”: an employee receives a top secret message from the “CEO” with the instruction not to discuss this request with anyone else and to make a high value wire (to an account abroad). Obviously, the money flows into a crime organization.
Currently I am working in Germany where one sees (including myself) an increase in these kinds of attempts. I suspect that most of the cases don’t make it into the paper however.
I refer to my article what measurements could be taken to avoid payment fraud, but would advise corporates as well to make a “quick scan”, as a lack of transparency and decentralization of payments increases the opportunity for fraud and cybercrime:
1. Do you centrally manage and control payment workflows?
2. Are payment workflows consistent within the group?
3. How many payment initiation systems do you run within your group and are limits and processes aligned?
4. Do you link your payments to your Cash flow forecast?
If all of the above questions can be answered with “yes” and the payment systems are limited, some risks are reduced and therewith “Leoni-cases” will hopefully be avoided.
Independent Treasury Consultant & Interim Manager
