FBI Resources To Recover Stolen Funds From Wire Transfer Fraud

Many clients who contact us have fallen victim to various types of online fraud or scams and have unknowingly wired money to a fraudulent party. Later, they realized that the wire transfer was fraudulent. Occasionally, it involves escrow fraud, where individuals send money for a real estate transaction to their title company, only to discover that the email they received from their title company was fraudulent.

Consequently, they end up wiring their closing funds and down payment to a scammer or fraudster. In other cases, it may involve investments that turn out to be scams. In the past, it seemed like a lost cause or a hopeless situation where no money could be recovered. However, many people are unaware that the FBI has a procedure in place to help recover funds that have already been sent out, and sometimes even banks are unaware of this.

The Financial Fraud Kill Chain (FFKC) involves a specific banking procedure utilized by the FBI to reverse funds sent to a fraudster. Here are some details on how it works:

Financial institutions perform this procedure for victim fund recovery. Normal bank procedures should be followed. The Financial Fraud Kill Chain can only be implemented if the fraudulent wire transfer meets certain criteria. It must be equal to or greater than $50,000. So, if your loss is only $49,900, this procedure cannot be utilized. However, if you have lost $50,000 or more and the wire transfer was international, sent overseas, as many scammers do, you must initiate a SWIFT call recall notice. Additionally, the wire transfer must have occurred within the last 72 hours.

However, we have observed instances where the last criterion can be addressed differently. Therefore, do not lose hope if it has been more than 72 hours. So, what steps should you take to initiate the Financial Fraud Kill Chain?

You need to provide the FBI with the following information obtained from the bank: the victim’s name and location, the original bank’s name, account numbers, and the recipient’s details, including the SWIFT code. You must also include the amount, transaction details, and other relevant information. For instance, forwarding information is often present in these wire transfers, as the FFC (Forwarding Financial Institution) indicates. These are the fundamental aspects of the FFKC.

Where does this come into play? FinCEN (Finance Crimes Enforcement Network) has a Rapid Response Program that is part of this initiative, and it has successfully recovered over a billion dollars for victims. This achievement occurred a year ago, and more recoveries have occurred since then. Now, let’s examine the success rate. When a victim of cyber fraud files a complaint with law enforcement, it is referred to FinCEN.

Subsequently, FinCEN collaborates with the FIU (Financial Intelligence Unit), the investigative unit, to activate the Rapid Response Program. Once this happens, it enters its kill chain system—the Financial Fraud Kill Chain. The success rate of this program is 74%. They have already responded to 1,700 incidents, referring to the prior year in 2021. However, there have been over 2,000 incidents overall, with a 74% success rate in recovering funds using the FFKC.

What type of fraud does this uncover? Criminals exploit the banking system to deceive parties into sending funds through wire transfers to incorrect destinations. They achieve this by sending fraudulent wire instructions and tricking individuals into redirecting legitimate payments to bank accounts controlled by fraudsters. This occurrence is particularly prevalent in real estate transactions.

For instance, if you have purchased a property and have a scheduled closing with a title company, they typically provide you with closing instructions, including wire transfer details, account numbers, and routing numbers. Consequently, you unknowingly wire your down payment to that fraudulent account.

Well, what happens is that criminals infiltrate your email chain. They spoof or hack the email and send you wire instructions, making it appear legitimate with company logos and contact information. Unfortunately, once you wire your money, it disappears. The FFKC (Financial Fraud Kill Chain) is a method to potentially recover funds from a fraudulent wire transfer. Another preventive measure is to send a small test payment before transferring the entire down payment. We have discussed this previously—sending $20, $100, or even $1000—to the wire contact at the title company directly, either by phone or in person, to confirm if they received it. You can wire the remaining amount using the same information if they confirm the receipt.

However, if you have already fallen victim, it is essential to be aware of the FFKC as a potential means to recover the money. You can find more information in the links provided or schedule a consultation with our company using teleclient. It is important to note that this recovery method applies to amounts exceeding $50,000 and involves an international fraudster, not within the U.S.