This issue of Heavy Metal is a tale of two email scams, one against a small company and the other against a gigantic toymaker. To read this blog, please send payment to me at [email protected].
Scams are on the rise from China and other, odder places … those emails from Nigeria.
Crime is going online. Most of the cases don't get reported. Why? Think about it, it's humiliating to get scammed on the phone or via an email, and nobody really wants to make it public.
Online scams are growing so quickly, it makes me sick. It's like the time the man from the “pavement company” paved half of my elderly mother's gravel driveway, then got her to give him a check, saying he would finish up later. (It ended up OK, the check got frozen). Scum that prey on old people deserve to get beat down with a baseball bat.
You can't take a Louisville Slugger to pound on email scammers, because they exist in the “cloud.” And when that cloud rains, down comes the rotten evil of criminality.
Wrap-Tite Inc., a niche maker of stretch films in Solon, Ohio, got screwed out of $500,000 from a wire transfer fraud. That's a huge amount of money for what is a modest company run by two men who hail from India, Sunny Daga and Suresh Bafna. Plastics News has run three stories on Wrap-Tight.
Mattel Inc., on the other hand, is a $2 billion behemoth, the other side of the spectrum from the stretch film company. So when Mattel lost $3 million in a Chinese email scam, well yeah, that's a lot of money, but percentage-wise, not so much. The scam happened in April of 2015, according to newspaper reports that only came out recently. (Mattel did not respond to questions from Heavy Metal).
The phishing scam against Mattel involved a bogus email that looked it was from the top company executive — a growing area of online crime.
Here are the details, from Associated Press and from Insider, an online publication out of Holland: An unidentified “finance executive” got an email from new CEO Christopher Sinclair, who had just the taken top spot that month after Mattel fired his predecessor. Toys are a tough business.
The “internal” email said to make a routine transfer of funds to pay a new vendor in China. The executive, who is identified as a woman (“she”) in press reports, made the payment. She “was eager to please her new boss,” AP reported.
She mentioned the payment to Sinclair a few hours later. And can't you just imagine that conversation?
But Mattel executives moved quickly, calling their U.S. bank, the police and the Federal Bureau of Investigation. It was too late, the money was in China. But they kept going, aided, according to AP, by a holiday in China that gave them time.
Here's the strange part, given what I understand from the few other industrial fraud cases I know about. Quoting straight from the AP report of this past March 31: “The company notified Chinese police, who quickly launched a criminal investigation, according to a letter from Mattel thanking Chinese authorities, which was obtained by the AP.”
Chinese police quickly launched a criminal investigation! And then: Chinese police acted right away to freeze the account in the Bank of Wenzhou, and a few days later, Mattel got its $3 million back. Yes, the Chinese police worked like Sgt. Joe Friday on “Dragnet,” diligently tracking down the bad guys (or more accurately, the bad geeks).