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Money defrauded from Google and Facebook ended up in six Latvian banks

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUPart of the USD 120 million defrauded from technology companies Google and Facebook were transferred to six banks in Latvia, as reported by LTV programme De Facto. Although the fraud was not discovered immediately, both corporations have managed to recover the money from Latvian banks.

In the second half of March, Lithuanian citizen Evaldas Rimašauskas admitted his guilt in fraud. Although he had other accomplices, Rimašauskas is the only one put on trial.

LTV journalists say the fraud scheme was primitive. Fraudsters created an e-mail address similar to Google and Facebook cooperation partner from Taiwan Quanta Computer and sent Google and Facebook a notification, requesting payments to be made to a new bank account.

In October 2013, Google performed three payments worth a total of USD 23 million to Rimašauskas’ owned company in Latvia with a name similar to Quanta Computer. The company had an account open in SEB Bank. Part of the money was transferred elsewhere. De Facto has information about similar transactions being made to Baltic International Bank and ABLV Bank.

The fraud was uncovered after a couple of weeks. The stolen money was still on those bank accounts and was frozen.

This means SEB Bank was not aware of the fraud, as millions poured to the bank account of a company registered in some apartment in Daugavpils whose previous base capital was only EUR 1. De Facto was told by SEB Bank that the fraud was identified internally.

Charges against Rimašauskas mention that he provided the bank with bills, contracts, agreements and other documents bearing forged signatures of company representatives.

«As for reaction from banks, it is hard to comment if someone should have done something sooner. But I believe Latvia’s authorities handled the situation well and quickly, because all the money that arrived was identified, intercepted and returned to their rightful owners,» says Latvia’s State Police Economic Crimes Enforcement Department’s 1st Office Chief Inese Gise.

De Facto reports that in 2015 fraudsters took on Facebook. Using an e-mail address registered in Moldova, fraudsters asked Facebook to provide a detailed account for previously made payments. They then informed Facebook about plans to change banks and sent Facebook new account details.

«Facebook took the bait and transferred nearly EUR 100 million to Cyprus-based Eurobank account of Dutch-based Moonbigtwo company.»

The money was then transferred from Cyprus elsewhere. The largest portion was transferred to Danske Bank branch office in Estonia – USD 8.9 million. In Latvia money ended up in four banks – USD 2.5 million in ABLV Bank, USD 980,000 in Baltikums Bank (now known as Blue Orange), USD 320,000 in Meridian Trade Bank, and USD 338,000 in Rietumu Banka.

Facebook performed payments to fraudsters starting from USD 100 to upwards of USD 36 million in a single transfer. The scheme came to light only when the real supplier from Taiwan sent a message to Facebook, saying that they had not received a single payment in three weeks.

US dollar transactions from Cyprus to other countries were performed by Deutsche Bank from New York. According to information from Deutsche Bank, approximately USD 4 million of the funds defrauded from Facebook ended up in Latvia. However, the arrest was put on the amount a little larger than USD 1 million. It is possible offshore companies decided to return the money because they felt the heat, De Facto suggests.

Latvia’s State Police report that some person had even used the money to purchase a luxurious car. State Police representative Gise says ‘that person tried proving the purchase was legal, but in the end it was declared illegal and the amount paid for the car was returned to Facebook’.

Fraudsters had even attempted to steal arrested money. Someone had submitted to the bank a forged prosecutor’s decision to lift the arrest on the frozen bank account while the prosecutor was away on vacation. The bank found it odd for the request to apply to only one of two accounts. The bank then looked into this matter and uncovered the attempt. A separate investigation has been launched. So far there are no suspects, De Facto reports.

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