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Network World - It started out as an ordinary workday for Michelle Marsico, who runs a business based in Redondo Beach, Calif., handling escrow funds for clients in real estate. But when she went online to check the funds-transfer activity in her commercial bank account, she found to her horror that it had been cleaned out by cybercrooks to the tune of almost half a million dollars.
Two dozen fraudulent electronic-funds transfers had whisked about $450,000 out of her account to bank accounts elsewhere for roughly 20 recipients whose names and addresses she didn't recognize. "I was in shock for a few minutes," says Marsico, president of Village View Escrow. "I thought, there must be a mistake."
It was all an online cyberheist against her and Professional Business Bank, where she had the Village View escrow account, and it turned her life upside down. The next shock was when she realized her bank, which called the FBI, wasn't going to be able to speedily recover the funds that had been sent to these 20 or so "money mules," the individuals recruited to help the organized cybercrime gang.
And since her bank wasn't going to quickly go after the money mules, Marsico decided to do it herself.
"I finally received a copy of the wire transfers, with the names and addresses of the recipients," she says. She frantically set out to find as many as she could through online searches.
Strangely, one of the recipients had actually called the company, angrily demanding that it "stop harassing him."
"They thought we were harassing him to send out the money after he had his bank call him about it. He thought the money legitimately came from us, and the criminals were trying to hurry him up," she says.
Some of the money mules that had been recruited to transfer stolen funds on to the crooks were indeed unaware they were part of a cybercrime, often having been recruited by means of fake job advertisements at online job sites like CareerBuilder.com. One older man in Hawaii thought the funds transfers were part of a textile-buying operation.
But "some did know what it was," says Marsico.
One man in New York that had received about $29,000 "was frank with me and said, 'I feel bad about it.' I said if you return the money, I'll let the Secret Service know that." She managed to get about a dozen of the recipients to cough up $72,000 of the stolen funds. But that left her out $373,000.
That left Marsico and her bank to square off over how this had happened, whether someone had broken into a Village View Escrow computer or something else. The focus of the dispute came to center around the nature of the authentication and funds-transfer validation process.
Village View Escrow ended up suing Professional Business Bank. Basically, the company contended that the authentication and funds-transfer authorization and validation process was insufficient, and the bank should be held responsible for the loss that Village View suffered.