In an increasingly digitalised business world, companies are not only threatened by economic fluctuations or competitive pressure – cybercrime also poses a growing threat. One particularly insidious scam is known as CEO fraud or business email compromise (BEC). Perpetrators use fake or hacked email addresses to impersonate company executives and trick employees into transferring large sums of money or divulging sensitive information. This type of fraud causes billions in losses to companies worldwide every year.
Whether you need preventive advice or legal support in an emergency, Schlun & Elseven Rechtsanwälte offers comprehensive expertise in commercial criminal law for CEO fraud and other cyberattacks in Germany. Our services range from securing evidence through IT forensic experts to criminal prosecution and enforcing claims against perpetrators and third parties. Close cooperation with technical experts and a practical, legally sound approach ensures effective protection against digital fraud schemes – and professional support if damage has already been done.
What is CEO Fraud?
A cyberattack specifically targeting companies is referred to as CEO fraud, also known as “business email compromise” (BEC).
In most cases, the perpetrators attempt to persuade company employees to transfer large sums of money abroad or to send sensitive data. Since it is usually not apparent to the person acting on behalf of the company that the perpetrator is a fraudster, they comply with the instructions of their supposed superior. Therefore, the victims of this type of fraud are exclusively companies, regardless of their size and industry. The devastating consequences of CEO fraud include financial loss and potential damage to reputation. The deceived employees who send the requested data and/or sums of money often face legal consequences. Therefore, it is crucial to take preventive measures against such attacks or act as quickly as possible once the fraud is detected.
CEO fraud in Germany affects companies across all industries and sizes – from German Mittelstand businesses to large corporations. Companies with international business relationships are particularly vulnerable, as foreign wire transfers are routine and less likely to raise suspicion. German companies have increasingly become targets due to their strong economic position and international trade relationships.
Common Types and Methods of CEO Fraud
CEO fraud in Germany typically involves perpetrators sending sophisticated, well-forged emails to company employees that appear to come from senior management. These CEO fraud schemes instruct employees to transfer substantial amounts to foreign bank accounts, often emphasizing the confidentiality and urgency of the transaction. To make their deception as authentic as possible, fraudsters conduct extensive research using publicly available sources and social media platforms to gather internal company information, employee roles, and personal details.
Beyond fake emails, CEO fraud can involve hackers compromising actual executive email accounts. Rather than requesting money transfers, some CEO fraud cases in Germany focus on obtaining sensitive data from HR, accounting, or controlling departments. This stolen information is then exploited for financial gain or competitive advantage.
German companies also face broader CEO fraud variations where employee email accounts are compromised instead of executive accounts. These hijacked accounts communicate with business partners, requesting payment of fraudulent invoices. Additionally, perpetrators impersonate suppliers and demand invoice payments to accounts controlled by the fraudsters.
Preventing CEO Fraud in Germany: Essential Protection Strategies
Beyond technical security measures, the most effective defence against CEO fraud in Germany involves comprehensive employee awareness and education programs. German companies must inform their workforce about these sophisticated scams to help them recognize deception attempts. Regular internal coaching and training sessions are particularly valuable for combating CEO fraud.
Company management should carefully monitor what information becomes publicly available, as this data often fuels CEO fraud attempts in Germany. Robust internal control mechanisms provide additional protection and must be activated whenever dubious payment instructions or data transfer requests arise.
Legal Liability and Compliance for CEO Fraud in Germany
When CEO fraud in Germany succeeds, liability questions frequently emerge involving employees, companies, banks, and insurance providers. German companies may face partial responsibility for damages, making it crucial to avoid contributory negligence. Establishing comprehensive compliance management helps German businesses protect against CEO fraud liability.
As a full-service law firm in Germany, we provide expert legal guidance to develop secure compliance structures. Our attorneys work with German companies to create robust frameworks that ensure legal compliance while protecting against sophisticated CEO fraud schemes targeting the German market.
Immediate Response and Legal Assistance for CEO Fraud in Germany
Maintaining composure is essential if you suspect your German company has fallen victim to CEO fraud despite all security precautions. Even when perpetrators seem untraceable, filing a criminal complaint with German authorities remains advisable, particularly given the substantial financial damages typically involved in CEO fraud cases in Germany.
Immediate steps should include changing all account passwords and contacting relevant financial institutions. Additionally, gathering all evidence for German investigating authorities is crucial. When CEO fraud in Germany involves specialized criminal gangs, multiple victims can help authorities uncover the network and potentially secure compensation.
Our legal team provides immediate assistance to German companies facing CEO fraud incidents. We guide clients through the complex process of reporting, evidence collection, and working with German law enforcement to maximise recovery chances and minimise ongoing liability exposure.
Practice Group: German Business Criminal Law
Practice Group:
German Business Criminal Law
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