Corporate cybercrime on an international scale has hit one of Omaha’s biggest and oldest companies.
The Scoular Co., an employee-owned commodities trader founded 120 years ago, has been taken for $17.2 million in an international email swindle, according to federal court documents.
An executive with the 800-employee company wired the money in installments last summer to a bank in China after receiving emails ordering him to do so, says an FBI statement filed last month in U.S. District Court in Omaha.
The orders turned out to be a fraud.
Scoular Chief Executive Chuck Elsea, whose identity was co-opted, said the company understands that it will be difficult to recover the money.
“It is encouraging to us that progress is being made in the criminal investigation that began promptly after the wire theft occurred in June 2014,” he said.
Scoular’s business, Elsea said, has not and will not be affected by the loss.
The gambit involved emails sent to a Scoular executive that purported to be from Elsea and the company’s outside auditing firm. The emails directed the wire transfer of millions of dollars to a Chinese bank. But court documents say the emails were really from impostors using email addresses set up in Germany, France and Israel and computer servers in Moscow.
It was a scam perpetrated on a big victim. Scoular was ranked as the 55th-largest privately held U.S. company by Forbes magazine last year, a major player in the markets for corn, soybeans and other commodities and for arranging the transportation and storage of the grains.
Size — Scoular has about $6.2 billion in annual revenue and locations in North and South America — was no shield in this case. In the end, the targeted Scoular executive wound up sending the $17.2 million via wire transfers to Shanghai Pudong Development Bank, to be held for a company called Dadi Co. Ltd.
“Dadi Co. Ltd. was and is the principal recipient of funds obtained by defrauding a company in the United States,” the FBI statement says.
Now, the FBI is seeking to recover the money via “the central authority of any foreign state for service in accordance with any treaty or other international agreement.” The agency has asked the U.S. District Court in Omaha to authorize seizure warrants to aid in the effort.
The FBI statement filed in support of the request for seizure warrants says the agency interviewed Scoular controller Keith McMurtry, in-house attorney Joan Maclin and Chief Financial Officer Roger Barber as part of the investigation.
The three wire transfers, the FBI says, happened in June 2014. They were prompted by emails sent to Scoular’s corporate controller, identified in the FBI statement as McMurtry. The emails purported to be from Scoular CEO Elsea, but were sent from an email address that wasn’t his normal company one.
The first email on June 26 instructed McMurtry to wire $780,000, which the FBI statement says he did. The next day, McMurtry was told to wire $7 million, which he also did. Three days later, another email was sent to McMurtry, instructing him to wire $9.4 million. McMurtry again complied.
The first two emails from the faux CEO contain the swindle’s setup, swearing the recipient to secrecy over a blockbuster international deal.
“I need you to take care of this,” read emails from the party pretending to be Elsea. “For the last months we have been working, in coordination and under the supervision of the SEC, on acquiring a Chinese company. ... This is very sensitive, so please only communicate with me through this email, in order for us not to infringe SEC regulations.”
The second email attempted to create a further air of legitimacy by instructing McMurtry to contact a certain employee of the company’s accounting firm for details on where to wire the money. McMurtry later received an email purported to be from the real employee of the real accounting firm, instructing him to wire the money to Shanghai Pudong Development Bank, a real bank in China with many branch offices and international clients.
The FBI said its interviews with McMurtry indicated that he “was not suspicious of the three wire transfer requests” because there was an element of truth to all of it:
» Scoular had been discussing expanding in China.
» McMurtry was at the time working on the annual audit with the company’s outside accounting firm, and the email address used by that accounting firm’s fake employee looked like it was from a valid email address for that company.
» The phone number provided for the accounting firm employee was answered by someone who identified himself by the name referred to in the CEO email.
McMurtry, who is no longer employed by Scoular, referred questions to his former employer when contacted by telephone.
Elsea declined to comment on whether the wire transfers violated company policies at the time, saying only that “we are very confident that our internal controls and the interbank systems” are advanced and secure.
“We are fortunate, as an employee-owned company with a very strong balance sheet and robust ongoing business,” Elsea said. “Obviously cyberfraud is a troubling concern and something we see on the rise, particularly for those with international operations.”
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