Executors of an Estate have lost £120,000 by sending the money to what they thought was their solicitor’s bank account.  Instead, a fraudster intercepted their email correspondence and posing as the solicitor gave them the bank account details of her own business account.  The money went to that account, from which £20,000 in cash was taken out every day for the next six days.  The money was intended for their solicitor to pay inheritance tax on the estate they were administering.  Although the Police and Action Fraud are involved the money has been lost and now the Executors have been forced to borrow £120,000 by way of a personal loan to discharge the tax liability.

The fraudster exploited a flaw in the banking system – the name on a bank account does not have to match an online or Chaps payment request.  Even if the transfer mandate says Donald Duck, the money will be paid to the account with that sort code and account number, whether the name matches the intended recipient or not.

The money the Executors sent was intended for their solicitors to pay inheritance tax liability on their deceased mother’s estate that they were administering.  The Executors telephoned their solicitor for the firm’s bank account details so they could transfer the money for the payment due to HMRC.  Later that morning an email arrived with the firm’s account and sort code in a Word file attachment.  The Executors instructed their bank to make a Chaps electronic payment for £120,000 to their solicitor to the account details they had been sent in the email.  The funds were then transferred to the receiving account.  The Executors emailed their solicitor to confirm they had made the payment and later received a reply purporting to be from their solicitor confirming the funds had been received.  However, a week later, when the Executors telephoned the firm requesting a receipt, they were told the firm had not received the money.  The Executors then discovered that the email from their solicitors had been hacked and what they had been sent was the fraudster’s account details, to which they had sent the £120,000.  The money had actually been sent to a NatWest business account in the name of Graceak Ltd and by the time the Executors found out, £20,000 in cash having been withdrawn every day over six days, all £120,000 had been emptied out of that account.  Graceak Ltd has since been dissolved according to Companies House records.

Never trust an email containing bank details.  Always telephone the person you want to pay and check bank account details directly with them before you send any money.

This post was written by Karen LevesleyFor further information, please contact:

Karen Levesley, senior associate, Commercial Dispute Resolution 

T: 0121 234 0105

E: Karen.Levesley@gateleyplc.com 

Leave a Reply

Your email address will not be published. Required fields are marked *

5 × three =

This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.