Company Loses $197K In Cyberheist, Has To Bribe Chinese Police With Cigarettes & Cash To Get Some Of It Back

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If someone steals nearly $200,000 from your business and you were able to track down the location of the thief, you’d hope the local police would be willing to arrest that criminal and help you get your stolen money back. But for one American business owner whose money had been illegally siphoned off by a Chinese company, it took payments of cigarettes and cash for the authorities to care.

KrebsOnSecurity.com has the wild story of an unnamed import/export company — we’ll refer to it as Vandelay Industries — that lost $197,000 after the Vandelay accountant’s computer was hijacked during an online session with their bank.

Though they could tell that the funds had been electronically transferred to a company in the Chinese city of Harbin, Vandelay couldn’t get their bank to care, since the company — and not the bank — had been victimized. Unlike consumers, who are protected by federal regulations that limit liability for fraudulent transactions, businesses don’t have the same safeguards.

Luckily, Mr. Vandelay knew a lawyer based in China who was willing to lend a hand. At first, the police demanded an FBI incident report on the crime before they would do anything, but the lawyer was ultimately able to convince them to accept just a local police report.

How? With the help of a gift-wrapped carton of cigarettes and a pledge to pay the officers a portion of the money if they could recover it.

That incentive got things moving, and after only two days, the police have located the company that had received the wire transfer. But in order to actually get to the bottom of things and get that money back, it would require paying for the two officers to fly to Beijing. Vandelay agreed, wiring $1,500 for the tickets while the police froze the account of the company that got the stolen money.

Vandelay then sent a colleague who knows the lawyer in China to meet with the attorney and the officers in Harbin. She opened a new account at a bank in Harbin, then paid the officers the agreed-to percentage for recovering the money.

In the end, Vandelay got back $166,000 of its stolen money, but there was one final roadblock. Since Vandelay didn’t have a business in the region, it couldn’t wire so much money directly back to its account back in the U.S.

But being in the import/export business, Vandelay made a deal with a company they know that does have a business presence in China. That company agreed to receive the recovered funds then pass it on back into the rightful hands of Vandelay Industries, and without taking a piece.

by Chris Morran via Consumerist