CEO Fraud: Detect, Defend, and Protect

CEO fraud is one of the most common and costly forms of corporate identity theft. Criminals impersonate executives, create urgency and confidentiality, and push through payments or master-data changes. This article shows how to reliably detect and prevent CEO fraud.

You will learn how typical attacks unfold, which variants exist, how to spot warning signs across email, phone and messenger, which public and internal information attackers exploit, and which processes, controls and trainings your company should implement now. Practical. Compact. Actionable.

I work at the intersection of forensic analytics, cybersecurity and prevention. The examples come from projects and trainings with Finance, Procurement, IT and Internal Audit. The goal is a clear plan that works in day-to-day operations without shortcuts. We also look at how data analytics and anomaly detection can help and where real-time approaches have limits.

CEO fraud is not a single scam

There are several similar schemes that aim to cause financial damage in a comparable way, e.g. advance-fee, invoice, order, investment or rental fraud.

In general these are forms of identity theft, where criminals steal the identity of a person or a company to prepare and execute fraudulent activities.

Related cybercrime offenses often appear alongside, such as social engineering and phishing.

Variants of CEO fraud

In practice several patterns recur. The most common variants at a glance:

• Internal fictitious deals: requests to transfer funds for alleged acquisitions, major contracts or purchases such as patents, real estate or machinery.
• Refunds of alleged overpayments: demands to reimburse a supposed duplicate or excessive customer payment.
• Urgent intercompany payments: references to emergencies or liquidity gaps within the group, often backed by plausible-looking documents.
• Abuse of external partners: names of real customers, suppliers or service providers are used to request goods, data or payments in ongoing or newly constructed processes.
• Deposits and prepayments: requests for upfront payments for supposed large orders or “expedite fees”.
• Fake orders: fictitious purchase orders with real contacts and convincing paperwork to obtain goods or money.
• Change of bank details: prompts to update account information for suppliers or customers to reroute payments to a new IBAN.
• Pretending to be an authority: letters demanding payment of taxes, fees or supposed fines.

In short: CEO fraud is identity theft in many guises and touches Finance, Procurement, master data, HR, IT and Management.

The typical CEO fraud flow

1. Research and preparation: attackers collect open information about the company, roles, processes and contact paths. Sources include website, social media, registers, press, out-of-office notes and visible email patterns.
2. Contact via email, phone or messenger: personalized messages to Finance, Procurement or management follow. Senders appear legitimate, often using look-alike domains or display names. Calls frequently support written communication.
3. Manipulation: urgency and secrecy are used to block questions. Fake documents, alleged contracts or PO numbers increase credibility. Requests aim at bypassing controls and forcing quick decisions.
4. Payment approval or master-data change: transfers to new accounts, splitting into partial payments or changing supplier IBANs are requested. Second-channel confirmations are actively avoided.
5. Cover-up: funds move to foreign or mule accounts, are forwarded and withdrawn. Traces are deleted, communication stops.

Prevention measures

Attackers only jump as high as they must. Raise the bar.

• Secure processes: four-eyes principle and out-of-band approval from defined thresholds. No exceptions without written documentation.
• Protect master data: change bank details only after a call-back using known numbers from the ERP. First payment after a new IBAN with a 24-hour hold and an extra approval.
• Enable email security: enforce SPF, DKIM and DMARC. Mark external senders. Show the full sender. Scan attachments in a safe environment.
• Limit public information: do not publicly announce executive absences. Publish direct dials, org charts and role profiles only where necessary.
• Detect anomalies: continuously monitor payments and master-data changes. Flag unusual amounts, new beneficiaries, payments shortly after IBAN changes and atypical times.
• Train and test: regular awareness training for Management, Finance, Procurement, IT and master-data teams. Quarterly phishing and social-engineering tests with feedback.
• Leadership by example: no shortcuts on approvals. If leaders bypass controls, identical behavior by attackers looks credible.
• Communication and playbook: inform internally about current scams. Clear steps on suspicion: stop payment, second-channel call, bank, preserve evidence, involve forensics.

Further resources: CEO Fraud Blog

CEO Fraud Blog – your guide in the fight against the sophisticated “grandparent scam for companies”.

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