DOJ Files Action to Recover Workers Union Funds Laundered in Wire Fraud Scheme

The DOJ filed a civil forfeiture action Wednesday to recover $5.3 million of funds it traced to an email scheme targeting an unnamed Massachusetts workers union, said DOJ in a news release Wednesday. It seeks to forfeit assets that constitute the proceeds of wire fraud, property involved in money laundering, and property traceable to such property under 18 U.S.C. Section 981(a)(1)(A).

A Dorchester, Massachusetts-based union was defrauded out of $6.4 million in January 2023 after receiving a spoofed email that appeared to come from its investment manager, alleged the civil action of forfeiture (docket 1:24-cv-11467), filed Wednesday in U.S. District Court for Massachusetts. The email allegedly changed the beneficiary bank account of the $6.4 million payment by “misleading the workers union into transferring funds to a bank account controlled by someone other than the intended recipient,” said the release.

The complaint alleges that the funds were then transferred through a series of intermediary bank accounts, with some transferred, or attempted to be transferred, to a cryptocurrency exchange or to bank accounts located in Hong Kong, China, Singapore and Nigeria. Investigators traced proceeds of the scheme to seven domestic bank accounts, and they were subsequently seized, it said. The $5.3 million it seeks was seized from six JPMorgan Chase bank accounts and one Texas Bank and Trust account, it said.

The action seeks to forfeit assets constituting the proceeds of “wire fraud, property involved in money laundering, and/or property traceable to such property,” said the complaint. The Secret Service is investigating the case, it said.

The DOJ described a business email compromise scheme as one targeting businesses that use wire transfers as a form of payment. The schemes target global corporations, governments and individuals, with current worldwide daily losses estimated at $8 million, it said. Perpetrators compromise legitimate email accounts through hacking schemes such as social engineering and malware, it said. Once a business email account is compromised, a fraudulent email is sent directing the recipient of the email “to unwittingly transfer funds to an illicit account,” or, “criminals create 'spoofed’ email domain names to trick people into thinking they know the sender,” it said.

The DOJ claims in the action that defendant bank accounts are subject to forfeiture to the U.S. for proceeds of wire fraud, property involved in concealment laundering transactions and property involved in laundering transactions greater than $10,000, said the complaint.