FBI warns businesses of Nigerian 'purchase order frauds'

Andrew Pring
30 October 2014

The FBI is stepping up investigations into sophisticated schemes to defraud office supply stores that are being organised by Nigerian cyber criminals.

To date, up to 400 actual or attempted “purchase order frauds” have been committed, causing around 250 vendors to write off nearly $5 million (£3.1 million) in unpaid-for goods.

The heists are carried out online or by telephone, with the fraudsters tricking retailers into believing they are from legitimate businesses and academic institutions and want to order merchandise. The retailers believe they are filling requests for established customers, but the goods end up being shipped elsewhere - often to the unsuspecting at-home internet users, who are then duped into re-shipping the merchandise to Nigeria.

Said FBI special agent Joanne Altenburg: “The criminals order large quantities of items such as laptops and hard drives. They have also ordered expensive and very specialised equipment, such as centrifuges and other medical and pharmaceutical items.”

The FBI website explains how the scam works:

• The criminals set up fake websites with domain names almost identical to those of real businesses or universities. They do the same for e-mail accounts and also use telephone spoofing techniques to make calls appear to be from the right area codes.

• Next, the fraudsters, posing as school or business officials, contact a retailer’s customer service centre and use social engineering tactics to gather information about the organisation’s purchasing account.

• The criminals then contact the target business and request a quote for products. They use forged documents, complete with letterhead and sometimes even the name of the organisation’s actual product manager. They request the shipments be made on a 30-day credit - and since the real institution often has good credit, vendors usually agree.

• The criminals provide a US shipping address that might be a warehouse, self-storage facility, or the residence of a victim of an online romance or work-from-home scam. Those at-home victims are directed to re-ship the merchandise to Nigeria and are provided with shipping labels to make the job easy.

• The vendor eventually bills the real institution and discovers the fraud. By then, the items have been re-shipped overseas, and the retailer must absorb the financial loss.

“Once the merchandise has been shipped to Nigeria, it is nearly impossible to get it back,” Altenburg said.

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