$1.5 Million Cyberheist Ruins Escrow Firm
A $1.5 million cyberheist against a California escrow firm earlier this year has forced the company to close and lay off its entire staff.
The heist began in December 2012 with a roughly $432,215 fraudulent wire sent from the accounts of Huntington Beach, Calif. based Efficient Services Escrow Group to a bank in Moscow, said Krebsonsecurity. In January, the attackers struck again, sending two more fraudulent wires totaling $1.1 million to accounts in the Heilongjiang Province of China, a northern region in China on the border with Russia.
Efficient Services and its bank were able to recover the wire to Russia, but the two wires to China totaling $1.1 million were long gone. Under California law, escrow and title companies are required to immediately report any lost funds. When Efficient reported the incident to state regulators, the California Department of Corporations gave the firm three days to come up with money to replace the stolen funds.
Three days later, with Efficient no closer to recovering the funds, the state stepped in and shut it down.
Up until the past few weeks, the firm’s remaining funds have been tied up in a conservatorship established by the state, effectively barring the company’s owners from accessing any of its money. In early July, the state appointed a receiver to help wind up the company’s finances, said Krebsonsecurity.
The court-appointed receiver – Peter A. Davidson of Ervin Cohen & Jessup LLP in Beverly Hills — said he and the company are contemplating their options for recovering more of the lost funds from the bank — Irvine, Calif. based First Foundation.
Efficient Services was out of business, forced to lay off its entire staff of nine employees, despite being on track to clear a half million dollars in profit this year and to reach a million dollars in 2014.