GIACT On Payments’ $29M Wire Fraud Wake-Up Call

Last week, the U.S. subsidiary of Japan’s largest financial media organization, Nikkei, made headlines as the victim of financial fraud to the tune of $29 million via a wire transfer gone bad. GIACT CEO David Barnhardt comments on the situation.

Details continue to emerge, but we know thus far that the transfer took place sometime in late September. Also, that it occurred due to “fraudulent instructions by a malicious third-party who purported to be a management executive of Nikkei,” according to a statement by the company.

Some of the information coming out of the Nikkei situation — David Barnhardt, chief experience officer (CEO) at GIACT Systems, told Karen Webster — is pretty head-turning. The amount of money stolen is certainly a big hit. Yet, what is unusual is that the fraudsters didn’t just imitate a management executive in a phishing email. They physically emulated the sound of his voice over the phone.

“I don’t want to applaud [the fraudsters] — far from it. Our job is to stop them. But you almost have to give them kudos for actually moving to foil voice biometrics. That is pretty slick. Just not in a good way,” Barnhardt said.

However, because of such unique details combing this story, it focuses international attention on this financial crime. These kinds of incidents — unlike other types of frauds and breaches that must be reported — are often taken as treasury losses, and never publicly disclosed. The learning opportunity here, as well as with other “canaries in the coal mine” dropping all over the world, is all the ways in which an ounce of prevention is worth a ton of cure when it comes to fraud.