05 February 2016

Wells Fargo wires crook $2.1m

29 February 2012  |  13344 views  |  1 wells fargo logo web screen shot

Wells Fargo has been tricked into transferring over $2 million from a customer escrow account to a scammer who faxed asking for the money.

The con, revealed in lawsuit papers seen by Forbes, involved an unnamed crook faxing the bank's corporate trust services department in San Francisco and convincing it to wire money from an escrow account Wells maintained for Californian hospital chain Catholic Healthcare West (CHW).

The scam was made possible because CHW is required to maintain $7.5 million in an escrow account as part of its contract with Merced County to operate a medical centre. The firm wanted to move the account to Wells from WestAmerica Bank, a move that needed the green light from the Merced County Board of Supervisors.

As part of the moving process, last February the board put a partial copy of the escrow agreement, including the signatures of Merced County director of public health Tammy Chandler and CHW CFO Michael Blaszyk, on the county's public Web site.

These signatures proved useful to the crook, who on 6 December included forgeries of them in a fax sent to Wells Fargo asking for $445,000 to be wired from CHW to an HSBC account in New York held in the name of HUGE International T. Ltd. The transfer did not go ahead because HSBC said it had no such account.

On 14 December another fax was received by Wells asking for $445,000 to be wired to a Hong Kong account for HUGE International at Hang Seng Bank. This was also rejected because no such account existed.

However, just days later a third fax asked for $989,000 to be sent to an account for Textil Trading UK Limited at Standard Chartered Bank in Hong Kong and this one went through.

This was followed two days later by a fax asking for $2.9 million to be sent to the Standard Chartered account - a request denied only because it required the sale of securities. The next day a fax asking for the smaller figure of $1.1 worked for the scammer.

Finally, on 28 December when it received a sixth fax asking for the transfer of $2.2 million, a Wells escrow agent called CHW and discovered it had been duped.

The US Attorney has now filed a "complaint for forfeiture" in a bid to get Hong Kong authorities to recover the stolen money from the fraudster's account. Meanwhile, Wells told Forbes that it had been the victim of a "sophisticated fraud".

Wells Fargo Bank Gives Scammer Three Tries - Forbes

Comments: (1)

Keith Appleyard - available for hire - Bromley | 01 March, 2012, 16:37

Bit worrying if this ever became possible in the UK, given that my Signature appears in the public domain on Annual Accounts & Report available on the Charity Commissioners website - no need to even pay a fee!

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

06 February, 2012
24 October, 2011
02 June, 2011

Related company news


Top topics

Most viewed Most shared
Fintech rising: Resistance is futile, says...
9210 views comments | 47 tweets | 38 linkedin
Digital transformation driving earnings at...
7701 views comments | 38 tweets | 35 linkedin
ECB eyes up European P2P payments
7394 views comments | 27 tweets | 37 linkedin
Visa opens up to developers
5876 views comments | 23 tweets | 39 linkedin
Mondo releases API to let customers play w...
5574 views comments | 22 tweets | 20 linkedin

Featured job

Find your next job