“$1.5M Cyber-Heist Typifies Growing Threat”
$1.5M Cyber-Heist Typifies Growing Threat
Efficient Escrow of California was forced to close its doors and lay off its entire staff when cybercriminals nabbed $1.5 million from its bank account. The thieves gained access to the escrow company’s bank data using a form of “Trojan horse” malware.
Once the hackers broke in, they wired $432,215 from the firm’s bank to an account in Moscow. That was followed by two more transfers totaling $1.1 million, this time to banks in Heilongjiang Province in China, near the Russian border.
The company recovered the first transfer, but not the next two. They were shocked to discover that, unlike with consumer accounts, banks are under no obligation to recoup losses in a cybertheft against a commercial account. That meant a loss of $1.1 million, in a year when they expected to clear less than half that. Unable to replace the funds, they were shut down by state regulators just three days after reporting the loss.
Net result? The two brothers who owned the firm lost their nine-person staff and faced mounting attorneys’ fees nearing the total amount of the funds recovered, with no immediate way to return their customers’ money.