Nov. 10, 2016
Business aircraft buyers and sellers may be at risk of fraud and other cybercrimes during aircraft sales transactions, according to experts.
FBI Special Agent Chad Knapp, of the bureau’s Oklahoma City office, said that parties of an aircraft transaction may be vulnerable to cybercrime because these transactions are often international, typically involve large sums of money and frequently occur on short notice. Because these conditions are common to the parties involved in the transactions, banks seldom question the activity, which increases the risk of wire-transfer fraud.
“Brokers, and others involved in the transaction, are often small businesses with no established IT department,” said Knapp. “In the day-to-day operations of these small to mid-sizes business, they are just not necessarily aware of the threats out there. Some malicious actors have discovered and targeted this type of business.”
Stewart H. Lapayowker, of Lapayowker Jet Counsel, P.A., cautions clients and escrow agents to carefully analyze incoming emails regarding aircraft transactions. In some cases, fraud attempts come in the form of emails meticulously designed to impersonate an actual party in the transaction. This can include copying a logo, using a similar email address and duplicating the true party’s email ending and signature.
Lapayowker also encourages clients to watch for syntax that seems non-standard, and details or timelines that don’t add up.
To prevent fraudulent transactions, Knapp recommends brokers and other parties to aircraft transactions get to know their clients well, requesting as much information as possible, including bank information, at the beginning of the process. A last-minute change in bank details could indicate potential fraud.
“Urgency is sometimes a telltale sign,” said Lapayowker. “Someone who wants funds wired immediately or has a change in wire instructions at the last minute (especially for relatively small amounts of money) should raise suspicion.”
Knapp suggested calling the bank involved immediately if a broker, escrow agent or other entity identifies a fraudulent transaction. Banks can sometimes recall a wire transfer, or at least freeze the recipient’s funds while the case is being investigated.
Knapp also recommended conducting a callback when receiving wire instructions, especially if an email includes last-minute changes. The inconvenience of making an extra phone call might save millions of dollars by preventing a fraudulent money transfer.
Finally, any identified instance of fraud involving a U.S. party or with a U.S. nexus should be reported to the local FBI office after contacting the bank that is transmitting the funds. The FBI requests unsuccessful fraud attempts be reported at www.ic3.gov.