Help, we sent a transfer to a fraudster!

As a reminder – the blocking of funds on a bank account is a tool at the disposal of the public prosecutor and every bank operating in Poland. In practice, it consists in the fact that certain funds covered by the blockade cease to be available to the account holder. The bank blocks the funds for a period of no longer than 72 hours and immediately notifies the public prosecutor, who may extend the blocking period by a decision for a specified period of time, but no longer than for 3 months.

For a more detailed description of the mechanism and procedure for blocking funds in a bank account, we encourage you to read the entry “72 hours of justice”.

Theory is theory, but does it even work? It turns out that yes – the described blockade is an extremely effective tool, among others in the case of sending a transfer to the bank account of fraudsters by mistake.

We were approached with such a problem by a client whose case forms the basis of today’s entry.

In its day-to-day operations, the Customer cooperates with businesses located all over the world, including the European Union. During the finalisation of one of the orders, the Customer’s e-mail conversation with its EU supplier became the subject of a hacking attack, as a result of which the fraudsters sent our Customer a fake invoice with false payment details. Instead of the customer’s real bank account, the invoice indicated an account held by a Polish bank at the disposal of the criminals.

As a result, in order to pay an invoice worth more than PLN 300 000, the customer mistakenly transferred the payment to the bank account indicated by the fraudsters. Immediately upon discovering the fraud, the client reported it to his bank and to the local police.

The law firm’s involvement in the case began when the Client, having lost all hope of recovering the lost funds, received a parcel containing an English-translated order of the prosecutor in charge of the case, from which the fact that the funds in the fraudsters’ bank account had been blocked was apparent. However, this did not mean that the funds had actually been recovered.

At this point, it is worth circling the timeframe in which we are ‘moving’. The criminal activity was disclosed by the client on 29 January. In the following days, the ‘disputed’ transfer made its way to Poland, where, on 8 February, the recipient bank detected the suspicious transaction and, on the basis of the Banking Law, blocked the funds for a period of only 72 hours while notifying the public prosecutor. The public prosecutor issued a decision on 9 February blocking the ‘disputed’ funds for the period from 8 February to 8 May. The order was then translated and sent to Asia. Due to the time-consuming nature of the indicated activities, it only arrived at the client’s premises in the first days of April.

This meant that two of the three months of the prosecutor’s blockade were ‘lost’ to translation, delivery and other paperwork, so it was extremely important to take immediate further action to recover the funds for the client.

After all the formalities of granting the necessary powers of attorney had been completed, the client’s representative had to be interviewed as a victim. In the meantime, due to the expiry of the period of blocking the funds in the account, it was necessary to issue a further order declaring the funds accumulated in the blocked account as material evidence and retaining them in the deposit account of the competent prosecutor’s office.

Subsequently, with the support of an attorney, the client filed a criminal report and testimony concerning the course of the fraud. In addition, the investigation established that the account held with a Polish bank, which was used to commit the crime, was opened in the name of a so-called “dummy”, in addition to a non-Polish citizen and using false identity documents.

This means two things – firstly, holding the real perpetrators of the fraud accountable has become virtually impossible. Thus, if a freezing order were to be issued in the course of a criminal trial, the client could wait indefinitely for the funds to be returned. Secondly, it would have proved equally impossible to recover the mistakenly transferred funds, if only the recipient bank had not regarded the transaction as suspicious and allowed it to continue to be transferred.

As we anticipated, a little over a month after the hearing, we received an order from the public prosecutor’s office to discontinue the proceedings due to the failure to detect the perpetrators and, much more importantly from the client’s perspective, an order to return the funds to the wronged party as material evidence.

The client received his money and the whole process of recovering it took about six months. On the one hand, this is certainly an extremely long period of time, which could threaten the liquidity of the wronged companies. On the other hand, it should be borne in mind that the whole ‘operation’ has been significantly prolonged due to its cross-border and even transcontinental nature.

It is said that happy endings are the most important and we can boast of one today. Thanks to the prompt reaction of the lawyers of the BBS law firm, we managed to recover the entire amount of nearly PLN 400 thousand for the Client. However, this would not have been possible without the reaction of the Client and the subsequent good cooperation between the attorney and the prosecutor. It should be borne in mind that in this type of crime, undue funds are very quickly distributed to further bank accounts, often in different countries, which in practice makes their recovery impossible, hence the need for a rapid reaction.