Enterprise tech distributor Arrow Inc will take a $13m charge on the chin after a fraudster posing as a company exec transferred money from the corporate bank account to an external one.
The admission came as Arrow outlined calendar Q4 numbers for the three months ended 31 December, with sales up six per cent year-on-year and 18 per cent quarter-on-quarter to $6.75bn.
The scam occurred on 22 January, the business confirmed:
“Arrow determined that it has been the target of a criminal fraud by persons impersonating a company executive, which resulted in unauthorised transfers of cash from a company account to outside banks accounts in Asia.”
It is not clear which member of the executive team the shape shifting fraudster purported to be, and Arrow did not mention this in its SEC filing.
“Investigation and legal action by the company and law enforcement are ongoing and the results of, and timing to conclude, these investigations are uncertain,” it added.
The probe, to date, indicated this was an “isolated event” and was not “associated with a security break or loss of data”.
The resulting one-time $13m charge is to be booked in the first quarter of calendar ’16, Arrow said.
Deloitte has previously highlighted what it reckoned is the growing threat from ‘fake president frauds, “affecting many companies at the moment”.
It involves convincing an employee to make emergency bank transfers to a third party, “in order to obey an alleged order of a leader under the pretext of a debt to pay, a provision in contract or a deposit”.
Organised crims are suspected of perpetrating these scams, “with a complete knowledge regarding the market, structure and customers of the companies they are attacking”.
For the previous quarter, Q4, the Global Components arm reported a two per cent jump in sales to $3.67bn and a ten per cent year-on-year rise in Global Enterprise Computing to $3.08bn. Group net profit jumped to $158.5m from $116.2m. ®