Chinese national arrested in Hong Kong over cyber fraud on Austrian aircraft parts maker

The company, FACC, sacked its chief executive officer after losing 42 million in so-called ‘fake president incident’

PUBLISHED : Friday, 26 August, 2016, 5:05pm
UPDATED : Friday, 26 August, 2016, 10:45pm

A Chinese citizen has been arrested in Hong Kong in connection with cyber that cost Austrian aerospace parts maker FACC 42 million (HK$368 million), Austrian police said on Friday.

FACC fired its chief executive Walter Stephan after the attack, which involved hoax emails asking an employee to transfer money for a fake acquisition project – a kind of scam known as a “fake president incident”.

FACC’s customers include Airbus and Boeing.

Email is the latest tool to be hijacked by fraudsters

A 32-year-old man, who was an authorised signatory of a Hong Kong-based firm that received around 4 million from FACC, was arrested on July 1 on suspicion of money laundering, a spokesman for Austria’s Federal Office for Crime said.

Such attacks, also known as “business email compromise”, involve thieves gaining access to legitimate email accounts inside a company – often those of top executives – to carry out unauthorised transfers of funds.

The technique, which relies on simple trickery or more sophisticated computer intrusions, typically targets businesses working with international suppliers that regularly perform wire transfers.

Hackers have their sights on Hong Kong, cyber security experts warn

A spokesman for FACC said the company was working on getting back 10 million which had been found and frozen on accounts in different countries. These 10 million are not included in the 42 million hit the group has already booked.

The spokesman declined to give details on the arrest or the location of the accounts.

In June, the US Federal Bureau of Investigation said identified losses from this scam totalled US$3.1 billion and had risen by 1,300 per cent in the past 18 months.

Cybercrime surges in Hong Kong fuelled by email scams and extortion

Such scams have been reported by 22,143 victims in all 50 US states and in 100 countries around the world.

The FBI said reports indicate that fraudulent transfers have been made to 79 countries with the majority going to Asian banks located in the mainland and Hong Kong.

Another tool for fraud, “ransomware”, which has received much media attention over the past year, refers to malicious software that thieves use to block access to a computer until a ransom is paid.

Security experts say the two trends are the fastest growing cyber security threats to businesses worldwide.