Scams from business compromise emails (BECs) have been labeled by the FBI as a “$5 billion” problem. Sometimes known as “CEO Fraud,” BECs are where an email, purportedly coming from a high-ranking company official or vendor, instructs an employee to wire a sum of money to a bank account, or instructs the employee to wire money owed to a new bank account. The company thereafter authorizes and wires the money to the new account, which is controlled by fraudsters. The fraudsters then withdraw the money before the fraud is discovered.
On July 6, 2018, the United States Court of Appeals for the Second Circuit, in Medidata Solutions, Inc. v. Federal Ins. Co., 17-2492 (July 6, 2018), became the first U.S. Court of Appeals to determine that a BEC perpetrated using a PHP script as a spoofing tool implicates “computer fraud” coverage under a crime policy.