International Wire Transfer Fraud Prevention in South Korea | Atlas Legal

1. What is International Wire Transfer Fraud?

Core Answer

International wire transfer fraud is a sophisticated cybercrime where hackers infiltrate the email accounts of parties engaged in international trade, monitor their communications and transaction details for extended periods, then impersonate the legitimate trading partner using fake email accounts to redirect payments to fraudulent bank accounts. This type of fraud has become increasingly prevalent in South Korea’s international trade sector.

How This Crime Works

The criminal methodology typically follows this pattern:

First, hackers gain unauthorized access to email accounts of companies or individuals involved in international transactions. This is usually accomplished through phishing emails, malware, or exploiting weak passwords. Once inside, they don’t immediately act. Instead, they silently monitor all email communications for weeks or even months.

Second, hackers study the transaction patterns, communication styles, invoice formats, and payment schedules. They learn the names of key personnel, typical transaction amounts, and contractual terms. This reconnaissance phase is crucial to making their eventual fraud convincing.

Third, at a critical moment—usually just before a scheduled payment—hackers create fake email accounts with domains nearly identical to the legitimate company’s domain. For example, if the real email is @company.com, they might use @company-com.net or @cornpany.com (replacing “m” with “rn”).

Fourth, using the fake email account, they send messages that appear entirely authentic, often copying the exact format and language of previous legitimate emails. They inform the victim that the company’s bank account has changed and provide new account details—which actually belong to the criminals.

Finally, the unsuspecting victim wires the payment to the fraudulent account. By the time the fraud is discovered—often only when the real trading partner inquires about the missing payment—the money has usually been withdrawn and dispersed through multiple accounts, making recovery extremely difficult.

Why This Fraud is So Effective

Experts have identified several factors that make this type of fraud particularly effective:

First, the information asymmetry. Because hackers have access to genuine transaction details, their fraudulent communications contain accurate information about shipments, invoice numbers, and previously agreed terms. This makes the fake emails highly convincing.

Second, the timing. Hackers typically send their fraudulent account change notifications at busy periods when victims are less likely to carefully scrutinize every detail. The urgency of completing the payment on time can override caution.

Third, the technical sophistication. The fake email domains are often so similar to legitimate ones that they can pass a casual inspection. Without character-by-character verification, the difference may not be noticed.

Fourth, the international element. Cross-border transactions involve more complexity and less face-to-face interaction than domestic transactions. Parties may never have met in person and rely entirely on email communication.

The Scale of the Problem

According to international trade security experts, this type of fraud has caused billions of dollars in losses globally. In South Korea, the problem has been growing as more Korean companies engage in international trade. Atlas Legal has handled numerous cases involving companies in Songdo International Business District and throughout Incheon who have fallen victim to such schemes.

What makes this particularly concerning is that many victims never report the fraud due to embarrassment or lack of awareness about potential remedies. This means the actual scale of the problem is likely much larger than reported statistics suggest.

2. How Email Hacking Fraud Occurs

Core Answer

Email hacking fraud operates through a systematic three-stage process: infiltration, reconnaissance, and execution. Hackers first gain access to email accounts through various methods, then spend considerable time monitoring communications to understand transaction patterns, and finally execute the fraud by impersonating legitimate parties at strategic moments. Understanding each stage is essential for developing effective countermeasures.

Stage 1: Email Account Infiltration

Experts have identified several common methods hackers use to gain access to email accounts:

Phishing Attacks

The most common infiltration method is phishing emails. Hackers send emails that appear to be from legitimate sources (banks, business partners, government agencies) with urgent messages requiring immediate action. These emails typically contain links to fake websites designed to look identical to legitimate login pages. When victims enter their credentials on these fake sites, hackers capture the login information.

Atlas Legal has seen numerous cases where company employees clicked on links in emails that appeared to be from their own IT department requesting password verification for “security updates.” In reality, these were phishing attempts.

Malware and Keyloggers

Hackers may send email attachments containing malware. When opened, this malicious software can install keyloggers that record everything typed on the keyboard, including passwords. Some malware can also provide remote access to the entire computer system.

Weak Password Exploitation

Many email accounts are compromised simply because they use weak, easily guessed passwords. Hackers use automated tools that can test thousands of common password combinations per second. Passwords like “company123” or “password2024” can be cracked in minutes.

Social Engineering

Sometimes hackers don’t need technical methods at all. Through social engineering, they manipulate people into revealing confidential information. For example, they might call a company claiming to be from the IT department and ask employees to verify their password for “urgent maintenance.”

Stage 2: Silent Monitoring and Reconnaissance

Once hackers gain access to an email account, they enter what experts call the “reconnaissance phase.” This is where the crime becomes particularly sophisticated:

Long-term Surveillance

Hackers typically monitor the compromised account for weeks or months without taking any action that might alert the victim. They read all incoming and outgoing emails, learning about ongoing transactions, business relationships, and communication patterns.

In cases handled by Atlas Legal, we’ve discovered that hackers monitored some accounts for over six months before executing their fraud. This patience allows them to gather comprehensive information.

Transaction Pattern Analysis

During this phase, hackers analyze:

• Which companies the victim trades with regularly
• Typical transaction amounts and payment schedules
• Invoice formats and numbering systems
• Names and roles of key personnel
• Communication styles and frequently used phrases
• Company procedures for payment approval

Document Replication

Hackers download copies of legitimate invoices, contracts, and other business documents. They use these as templates to create convincing forgeries. The fake invoices they later send are often pixel-perfect replicas of real ones, with only the bank account number changed.

Stage 3: Fraud Execution

After thorough preparation, hackers execute the fraud with precision timing:

Strategic Timing

Experts note that hackers typically strike at moments when victims are most vulnerable to deception:

• Just before major holidays when staff may be rushed
• During high-volume trading periods
• When large payments are due
• During staff turnover or when new employees are handling transactions

Fake Email Creation

The hacker creates an email account with a domain almost identical to the legitimate trading partner’s domain. Common techniques include:

• Substituting similar-looking characters (rn for m, 1 for l)
• Adding or removing hyphens or dots
• Using different top-level domains (.net instead of .com)
• Adding extra words (company-inc.com instead of company.com)

The Fraudulent Communication

Using the fake email account, the hacker sends a message that mimics the legitimate company’s communication style perfectly. The message typically:

• References real transaction details (invoice numbers, shipment dates, product specifications)
• Uses professional language consistent with previous communications
• Provides a plausible reason for the account change (bank upgrade, account closure, regulatory compliance)
• Includes official-looking attachments with the new account details
• Creates urgency to prevent delayed payment

Payment Redirect

The victim, seeing all the familiar transaction details and not carefully scrutinizing the sender’s email address, wires the payment to the fraudulent account provided by the hacker.

Why Detection is Difficult

Experts emphasize that this fraud is particularly hard to detect because:

First, the hacker has perfect information. Because they’ve been monitoring real communications, they know exactly what to say and when to say it. There are no inconsistencies that might trigger suspicion.

Second, the fake emails are not random spam. They’re highly targeted, personalized communications that appear entirely legitimate in context.

Third, companies often discover the fraud only after the real trading partner inquires about non-receipt of payment—sometimes days or weeks after the fraudulent wire transfer.

Atlas Legal’s experience confirms what experts say: by the time most victims realize they’ve been defrauded, the money has already been withdrawn and dispersed through multiple accounts, making recovery extremely challenging.

3. Real Fraud Cases in South Korea

Core Answer

Atlas Legal has handled multiple international wire transfer fraud cases affecting Korean companies engaged in global trade. These real cases demonstrate common patterns, critical mistakes that enabled the fraud, and lessons learned. While we cannot disclose specific client information, these case studies illustrate the mechanics and consequences of this type of crime in the South Korean business context.

Case Study 1: The German Trading Partner Impersonation

※ Details have been modified to protect client confidentiality

Background

A Korean manufacturing company based in Songdo had been trading with a German buyer for over three years. The relationship was well-established, with regular shipments every quarter. Payment had always been made promptly to the same German bank account.

How the Fraud Occurred

Three weeks before a scheduled payment of $230,000, the Korean company received an email from what appeared to be the German buyer’s purchasing manager. The email explained that due to a “bank system upgrade,” the company had opened a new account and all future payments should be directed there. The email included official-looking bank documentation.

The email address looked correct at first glance, but upon close examination by Atlas Legal attorneys, we discovered it was @company-trade.com instead of the legitimate @companytrade.com. This subtle addition of a hyphen made the fake domain nearly indistinguishable from the real one.

The Korean company’s accounting department processed the payment without calling the German buyer to verify. The wire transfer was completed on a Friday afternoon.

Discovery and Response

The following Monday, the real German buyer contacted the Korean company asking about the delayed payment. That’s when they realized the fraud. The Korean company contacted Atlas Legal immediately—approximately 72 hours after the fraudulent transfer.

Our attorneys took immediate action:

1. Contacted the Korean bank to attempt to recall the wire transfer
2. Filed a police report in Korea
3. Engaged our partner law firm in Germany to file emergency account freeze petitions
4. Obtained confirmation from the real German buyer that they had not changed accounts

Outcome

The German court granted the emergency freeze order. Unfortunately, the hacker had already withdrawn approximately 40% of the funds. However, we successfully recovered the remaining $138,000 (60% of the loss). If the client had contacted us within 24 hours instead of 72 hours, recovery might have been complete.

Lessons Learned

This case taught several critical lessons:

• Never process account change requests based solely on email
• Always verify through phone or video call using previously established contact information
• Scrutinize email addresses character by character
• The speed of response is crucial—every hour matters
• Local legal expertise in the destination country is essential for recovery

Case Study 2: The Chinese Supplier Fraud

※ Details have been modified to protect client confidentiality

Background

A Korean electronics company regularly imported components from a Chinese supplier. The business relationship had existed for five years with dozens of successful transactions.

How the Fraud Occurred

Hackers compromised both the Korean company’s email server and the Chinese supplier’s email server. This dual infiltration gave them a complete picture of both sides of the transaction.

They waited until a large order worth $180,000 was about to be paid. Then, using a fake email address impersonating the Chinese supplier, they sent an invoice with altered bank account details to the Korean company. Simultaneously, they sent emails to the Chinese supplier claiming the Korean company was experiencing “temporary payment delays” and would pay next week.

This sophisticated coordination kept both parties from communicating directly and discovering the fraud immediately.

Discovery and Response

The fraud was discovered when the Chinese supplier called about the “delayed” payment a week later. By then, the Korean company had already wired the funds to the fraudulent account.

When they contacted Atlas Legal, our investigation revealed the dual infiltration. We coordinated with a Chinese law firm to trace the funds, but unfortunately, the money had already been withdrawn and dispersed through multiple accounts across different cities in China.

Outcome

Despite filing police reports in both countries and pursuing all legal remedies, recovery was not possible. The case remained unsolved, and the Korean company suffered a complete loss of $180,000.

Lessons Learned

This devastating case highlighted:

• Hackers may compromise multiple parties’ systems simultaneously
• Prevention is infinitely more important than attempted recovery after the fact
• Companies must establish protocols requiring phone verification for any payment changes
• Email security must be a top priority for all companies engaged in international trade

Case Study 3: The Vietnam Manufacturing Fraud

※ Details have been modified to protect client confidentiality

Background

A Korean garment company outsourced manufacturing to a Vietnamese factory. Payments were made monthly based on production volumes.

How the Fraud Occurred

In this case, the hacker appeared to have insider knowledge or assistance. The fraudulent email came just before the lunar new year holiday when staff were rushed and less attentive to details. The fake email cited “urgent tax compliance requirements” as the reason for the account change.

The accounting staff, pressed for time and wanting to ensure the Vietnamese workers received payment before the holiday, processed the wire transfer of $95,000 without verification.

Discovery and Response

The fraud was discovered on the first working day after the holiday when the Vietnamese factory contacted about non-receipt of payment. Atlas Legal was engaged immediately, and we coordinated with Vietnamese legal counsel.

The Vietnamese attorneys filed emergency petitions and worked with local banking authorities. Through swift action, we were able to freeze the account before any withdrawal occurred.

Outcome

This was a rare complete success. Due to immediate action and the Vietnamese bank’s cooperation, the entire $95,000 was frozen and ultimately recovered. The case demonstrates what’s possible when response is truly immediate and local legal expertise is engaged without delay.

Lessons Learned

This successful recovery reinforced:

• Immediate response (within hours, not days) dramatically increases recovery chances
• Holiday periods are high-risk times when vigilance must be maintained
• Having pre-established relationships with international law firms enables faster response
• Some countries have more effective mechanisms for freezing accounts than others

Common Patterns Across All Cases

Atlas Legal’s analysis of these and other cases reveals consistent patterns:

Timing

Hackers almost always strike at busy periods: before holidays, during high transaction volumes, or when new staff are handling processes.

Email Similarity

The fake email addresses are always remarkably similar to legitimate ones—similar enough to pass casual inspection but different enough for hackers to control.

Authentic Details

Fraudulent communications contain accurate transaction details that make them convincing. This is only possible because hackers have been monitoring communications.

Time Pressure

Fraudulent messages often create artificial urgency (“bank is closing the account,” “tax deadline approaching,” “payment must be received before holiday”) to prevent careful verification.

Recovery Challenges

In all cases, recovery became more difficult with each passing hour. Cases where victims responded within 24 hours had significantly better outcomes than those with delayed responses.

Atlas Legal’s Role

Atlas Legal, located in Songdo, Incheon, specializes in corporate law, corporate disputes, corporate advisory, and corporate crime (fraud, embezzlement, breach of trust, tax law, customs law). Our experience with international wire transfer fraud cases has taught us that prevention through proper contract drafting and email security is far more effective than attempting recovery after fraud occurs. However, when fraud does happen, immediate engagement of both Korean and foreign legal counsel offers the best chance of recovery.

4. Five Essential Prevention Methods

Core Answer

Experts recommend five fundamental prevention measures that, when properly implemented, can dramatically reduce the risk of international wire transfer fraud: establishing a no-account-change policy, verifying changes through phone or video call, scrutinizing email addresses character-by-character, enhancing email security, and conducting regular staff training. Atlas Legal advises all clients engaged in international trade to implement all five measures as a comprehensive prevention system.

Method 1: Establish a No-Account-Change Policy

The single most effective prevention measure, according to experts, is establishing and strictly adhering to a no-account-change policy.

What This Means

This policy states that once a payment account is established in a contract, it will never be changed through the duration of the business relationship. Any attempted change should be treated as a potential fraud indicator requiring extraordinary verification.

How to Implement

Atlas Legal recommends including explicit language in all international contracts:

“The Seller’s designated payment account is [account details]. This account shall not be changed under any circumstances during the term of this Agreement. The Buyer shall not be responsible for any payments made to accounts other than the designated account, regardless of any communications purporting to change the account. Any account change shall require an amendment to this Agreement signed by both parties in original.”

Legal Effect

This contractual provision serves multiple purposes:

• It creates a clear standard that helps employees recognize fraud attempts
• It establishes that account changes require formal contract amendments, not email requests
• It clarifies liability if fraud occurs—protecting the party that follows the policy
• It provides legal recourse against parties that fail to honor the policy

Experts emphasize that this not only prevents fraud but also clarifies responsibility allocation. If an account change email is sent and payment is made to a fraudulent account, the contractual provision makes clear who bears the loss.

Method 2: Verify All Changes Through Phone or Video Call

Experts universally recommend that any communication about account changes, representative changes, or significant transaction modifications must be verified through direct voice or video contact.

Why Email Alone Is Insufficient

Email verification is meaningless because if a hacker has compromised an email account, they can send confirmation emails from that account. Voice and video, however, are much harder to fake.

Proper Verification Procedure

Atlas Legal advises clients to follow this protocol:

1. Receive Change Notice: If you receive any email about account or representative changes, do not respond to that email or call numbers provided in it.
2. Use Established Contacts: Look up contact information from your original contract or previous verified communications—not from the suspicious email.
3. Call Directly: Call the established contact person using the verified phone number. Ask them directly: “Did you send an email about changing the payment account?”
4. Video Confirmation for Large Amounts: For particularly large transactions, request a video call where you can see and confirm the identity of the person authorizing the change.
5. Document Everything: Keep records of the verification call—who you spoke with, when, and what they confirmed.

Real-World Application

In all the fraud cases Atlas Legal has handled, the common factor was that victims relied solely on email without phone verification. In contrast, clients who implemented mandatory phone verification procedures successfully prevented fraud attempts. One client reported receiving a fraudulent account change email but immediately recognized it as fraud when their phone call to the trading partner revealed no such change had been made.

Method 3: Scrutinize Email Addresses Character-by-Character

Experts stress that many fraud cases succeed because victims don’t carefully examine the sender’s email address. The human eye can easily miss subtle differences in similar-looking domains.

Common Deception Techniques

Hackers use sophisticated methods to create fake domains that appear legitimate:

• Character Substitution: Using “rn” to look like “m” (exarnple.com vs example.com), using “1” for “l”, or “0” for “O”
• Extra Characters: Adding hyphens or dots (company-trade.com vs companytrade.com)
• Different Extensions: Using .net instead of .com, or .co instead of .com
• Additional Words: Adding words that seem plausible (company-international.com vs company.com)
• Spelling Variations: Slight misspellings (compnay.com vs company.com)

How to Verify Email Addresses

Atlas Legal recommends these specific practices:

1. Compare Side-by-Side: Open a previous legitimate email from the trading partner and compare the email address character-by-character with the new email.
2. Check the Full Address: Don’t just look at the display name. Check the actual email address (often shown in brackets or when you hover over the sender’s name).
3. Maintain a Contact List: Keep an authorized contact list with verified email addresses for all trading partners. Any email from an address not on the list should trigger verification procedures.
4. Use Email Verification: Some email systems can automatically flag emails from outside your organization or from new senders. Enable these features.

Method 4: Enhance Email Security

Experts recommend comprehensive email security measures to prevent account compromise in the first place. This will be covered in detail in section 7, but key points include:

• Regular password changes with strong, complex passwords
• Two-factor authentication (OTP) for all email accounts
• Blocking foreign IP logins when not needed
• Anti-phishing filters and malware detection
• Regular security audits

Method 5: Conduct Regular Staff Training

Experts emphasize that technical measures are insufficient if employees don’t understand the risks and proper procedures.

What Training Should Cover

Atlas Legal recommends quarterly training sessions that include:

• Real examples of fraud attempts (anonymized case studies)
• How to recognize phishing emails
• The company’s verification procedures for account changes
• How to scrutinize email addresses
• What to do if they suspect fraud
• The consequences of not following security procedures

Creating a Security Culture

Experts stress that preventing fraud requires creating a corporate culture where security is prioritized. This means:

• Employees should feel empowered to question suspicious communications
• Taking time to verify changes should be praised, not seen as inefficient
• Senior management must model good security practices
• Near-miss incidents should be analyzed and lessons shared

In Atlas Legal’s experience, companies with strong security cultures—where employees are trained, vigilant, and empowered to question suspicious requests—successfully prevent fraud even when sophisticated attempts are made. The human element remains the strongest defense when properly prepared.

5. Contract Terms to Prevent Fraud

Core Answer

Incorporating specific anti-fraud provisions into international trade contracts provides both preventive protection and legal recourse if fraud occurs. Based on expert recommendations and Atlas Legal’s practical experience, key contractual provisions should address account designation, change procedures, liability allocation, and verification requirements. These provisions create clear standards that make fraud more difficult and establish responsibility if fraud occurs.

Essential Contractual Provisions

1. Account Designation Clause

Atlas Legal recommends including detailed account designation provisions:

“The parties hereby designate the following accounts for all payments under this Agreement:

Seller’s Account:
Bank Name: [Full official bank name]
Account Number: [Complete account number]
SWIFT Code: [SWIFT/BIC code]
Account Holder Name: [Exact legal name]
Bank Address: [Full bank address]

Buyer’s Account (if applicable):
[Same details]

These accounts are designated as of the date of this Agreement and shall be the sole accounts for payments hereunder.”

2. No-Change Policy Clause

This is the most critical provision according to experts:

“The designated accounts shall not be changed during the term of this Agreement under any circumstances. Neither party shall request account changes via email, fax, or other electronic communication. Any purported account change communicated through such means shall be deemed invalid and without effect.

If exceptional circumstances require an account change, such change shall:

• Be requested in writing by registered mail or courier with signature confirmation
• Be verified through direct telephone or video conference call between authorized representatives
• Require an amendment to this Agreement executed in original by authorized signatories of both parties
• Not take effect until thirty (30) days after the amendment is fully executed

”

Legal Effect

Experts explain that this provision serves multiple purposes. First, it establishes clear procedures that make fraud more difficult because hackers cannot simply send an email claiming account changes. Second, it creates legal clarity about what constitutes valid account changes. Third, it provides a defense against claims if a party follows these procedures and still suffers fraud.

3. Liability Allocation Clause

Atlas Legal recommends explicit provisions about who bears loss if fraud occurs:

“The parties acknowledge the risk of international wire transfer fraud and agree as follows:

• If Buyer makes payment to an account other than the designated Seller’s account specified in this Agreement, despite no valid account change procedure having been completed, Buyer shall bear all risk of loss and such payment shall not constitute satisfaction of Buyer’s obligations hereunder.
• If Seller receives payment to the designated account, Seller’s obligations shall be deemed fulfilled regardless of the source of funds.
• Each party shall maintain reasonable security measures for its email and communications systems and shall promptly notify the other party of any suspected compromise or fraud.

”

Why This Matters

Experts emphasize that clear liability allocation prevents disputes about who bears the loss if fraud occurs. Atlas Legal has seen cases where, absent such provisions, the parties ended up in protracted litigation about whether payment to the wrong account satisfied contractual obligations. With this clause, the responsibility is clear: the party that failed to follow proper verification procedures bears the loss.

4. Verification Requirements Clause

Experts recommend specifying mandatory verification procedures:

“The parties agree to the following verification procedures:

• All payment instructions shall be verified through direct voice telephone call to the designated contact person at [phone number]. Email-only confirmations are insufficient.
• For payments exceeding [specified amount], verification shall include video conference call or in-person meeting.
• Each party shall designate authorized representatives for payment-related communications and promptly notify the other party of any changes to such representatives.
• Communications regarding payment or account information received from email addresses not previously verified shall trigger mandatory verification procedures before any action is taken.

”

5. Notice and Contact Information Clause

Atlas Legal recommends detailed contact provisions:

“All notices related to payment, account information, or other material matters shall be sent to:

For Seller:
Authorized Representative: [Name and title]
Email: [Email address]
Phone: [Phone number with country code]
Physical Address: [Complete address]

For Buyer:
[Same information]

Any communication from addresses, phone numbers, or sources not listed above shall be verified before acting upon such communication. Changes to contact information must be notified in writing and confirmed through the existing contact information before the change takes effect.”

Additional Protective Provisions

6. Anti-Fraud Cooperation Clause

Experts suggest including mutual cooperation obligations:

“The parties shall cooperate in good faith to prevent fraud, including:

• Promptly reporting any suspected email compromise or fraud attempts
• Providing reasonable assistance in investigating any fraud incidents
• Maintaining reasonable cybersecurity measures for communications
• Sharing information about fraud attempts that may affect the other party

”

7. Dispute Resolution for Fraud Cases

Atlas Legal recommends specific provisions for fraud-related disputes:

“In the event of any dispute arising from potential wire transfer fraud:

• The parties shall immediately suspend any pending transactions and payments
• Each party shall preserve all relevant evidence including email communications, payment records, and system logs
• The parties shall cooperate with law enforcement investigations
• Disputes shall be resolved through [specify arbitration or litigation venue], with the prevailing party entitled to attorney’s fees

”

Practical Implementation Advice

Experts and Atlas Legal’s experience suggest these implementation practices:

Review Existing Contracts

If you have ongoing contracts without these provisions, consider proposing amendments to add them. Most legitimate trading partners will appreciate additional security measures.

Standard Terms

Incorporate these provisions into your standard contract templates so all new agreements include them automatically.

Explain to Partners

When introducing these provisions, explain to trading partners that they protect both parties from fraud risk. Frame it as a mutual benefit rather than a sign of distrust.

Train Staff on Contractual Requirements

Ensure your accounting and finance staff understand that the contract mandates specific verification procedures. The contract provisions are only effective if employees actually follow them.

Document Compliance

Maintain records showing that you followed contractual verification procedures. If fraud occurs despite your compliance, this documentation supports your legal position.

Legal Effectiveness in South Korea

Under South Korean law, these contractual provisions are generally enforceable. Atlas Legal’s litigation experience shows that Korean courts respect clear contractual allocations of fraud risk, particularly when both parties are businesses engaged in international trade who should be aware of these risks.

The key is that the provisions must be clear, specific, and actually followed in practice. General or vague anti-fraud language is less effective than detailed, specific procedures like those outlined above.

Experts emphasize that while contracts cannot prevent determined hackers from attempting fraud, they can significantly reduce the success rate of fraud attempts and provide clear legal recourse when fraud does occur. Companies that implement comprehensive contractual protections, combined with operational security measures, achieve the best results in preventing and mitigating wire transfer fraud.

6. How to Verify if an Email is Fake

Core Answer

Experts have identified specific indicators that can reveal fraudulent emails, even when they appear highly convincing. Key verification methods include character-by-character email address inspection, header analysis, communication pattern review, and independent confirmation through established channels. Atlas Legal trains clients in systematic email verification procedures that have successfully prevented numerous fraud attempts.

Critical Warning Signs of Fake Emails

1. Domain Name Variations

This is the most common and easily missed indicator, according to experts. Hackers create domains that are nearly identical to legitimate ones:

Character Substitution:

• Using “rn” instead of “m”: company.com → cornpany.com
• Using “1” (number one) instead of “l” (lowercase L): global.com → g1obal.com
• Using “0” (zero) instead of “O”: motors.com → m0tors.com
• Using capital “I” instead of lowercase “l”: billing.com → bIlling.com

Additional Characters:

• Adding hyphens: companytrade.com → company-trade.com
• Adding dots: companyname.com → company.name.com
• Adding descriptive words: company.com → company-international.com

Different Extensions:

• Using .net instead of .com: company.com → company.net
• Using .co instead of .com: company.com → company.co
• Using country codes: company.com → company.com.cn

Spelling Variations:

• Missing letters: absolute.com → absote.com
• Transposed letters: business.com → busniess.com
• Extra letters: export.com → expport.com

Atlas Legal emphasizes that these variations are designed to pass casual inspection. Only character-by-character comparison reveals the fraud.

2. Unfamiliar Sender Names

Experts note that hackers sometimes use fake names or titles:

• An email from someone you’ve never heard of claiming to be the “new” manager
• Titles that don’t match previous communications (CFO instead of Accounting Manager)
• Generic titles like “Accounts Department” instead of specific names

3. Unusual Timing

According to experts, timing can be a red flag:

• Requests sent at odd hours (middle of the night in the sender’s timezone)
• Emails received just before holidays or weekends
• Urgent requests received when you know the trading partner is closed
• Sudden account changes right before major payments are due

4. Urgent or Threatening Language

Experts identify pressure tactics as common in fraud attempts:

• “Urgent: immediate action required”
• “Account will be closed if payment not received by [deadline]”
• “Tax authorities require immediate account change”
• “Bank system upgrade requires all payments to new account”

Legitimate account changes are rarely urgent and never threaten negative consequences for delays in updating payment information.

5. Requests to Keep Communication Confidential

Hackers may try to prevent verification by requesting confidentiality:

• “Please don’t mention this to anyone else in our company”
• “This account change is confidential for tax purposes”
• “Don’t call our main number, use this direct line instead”

Experts warn that legitimate business communications are almost never confidential in this way. This is often an attempt to prevent you from calling the trading partner to verify.

Systematic Email Verification Process

Atlas Legal recommends this step-by-step verification process for any email requesting account changes or containing payment instructions:

Step 1: Initial Assessment

1. Does this email request an account change or payment to a different account?
2. Is this the first time I’m seeing this account?
3. Does anything about this email seem unusual or create urgency?

If the answer to any question is “yes,” proceed to detailed verification.

Step 2: Email Address Verification

1. Open a previous, verified email from this trading partner
2. Compare the domain name character-by-character
3. Check if the display name matches the actual email address
4. Look for subtle variations in spelling or characters

Step 3: Communication Pattern Analysis

1. Does the writing style match previous emails from this person?
2. Are there unusual grammatical errors or phrasing?
3. Does the signature block match previous emails?
4. Are attachments in the expected format?

Step 4: Header Inspection

Experts recommend checking email headers for technical indicators of fraud:

1. Most email systems allow you to view “full headers” or “original message”
2. Look at the “Return-Path” and “Reply-To” fields—do they match the sender’s stated email?
3. Check the “Received” fields—do the servers make sense for the purported sender’s location?
4. Look for any indication that the email was sent through a web-based system rather than the company’s email server

While this requires some technical knowledge, it can reveal sophisticated spoofing attempts.

Step 5: Independent Verification

This is the most critical step according to both experts and Atlas Legal’s experience:

1. Do not respond to the email or call numbers provided in it
2. Look up the trading partner’s phone number from your original contract or verified records
3. Call the established contact person directly
4. Ask: “Did you send an email about [account change/payment instructions]?”
5. If they say no, you’ve discovered fraud—report it immediately
6. If they say yes, ask them to confirm the details verbally and document the conversation

Common Mistakes to Avoid

Experts and Atlas Legal have identified these common verification failures:

Mistake 1: Trusting Email Alone

Never assume an email is legitimate just because it looks professional or contains accurate transaction details. Hackers have those details because they’ve been monitoring your communications.

Mistake 2: Using Contact Information from the Suspicious Email

If you call a phone number provided in a fraudulent email, you’re calling the hacker. Always use independently verified contact information.

Mistake 3: Accepting Email Confirmation as Verification

If someone emails you an account change and you email back asking “Is this real?” and get a response saying “Yes,” this proves nothing. The hacker controls the email account and can confirm their own fraud. Voice or video verification is essential.

Mistake 4: Being Embarrassed to Verify

Some people feel it’s awkward or implies distrust to call and verify. Experts emphasize that legitimate trading partners understand and appreciate security measures. In Atlas Legal’s experience, honest partners are never offended by verification calls.

Mistake 5: Rushing Due to Urgency

Fraudulent emails often create artificial urgency to bypass normal procedures. Experts warn: legitimate business can always wait an extra hour for security verification. Taking time to verify properly is always justified.

Advanced Detection Techniques

For sophisticated fraud attempts, experts suggest additional verification methods:

Test Questions

When you call to verify, ask questions only the real trading partner would know:

• “What was the invoice number on our last shipment?”
• “What color was your packaging last time?”
• “What did we discuss in our last phone call?”

Shared Secret System

Some companies establish code words or secret phrases with key trading partners. Any request for account changes must include the correct code word.

Digital Signatures

Technical solutions like PGP/GPG email signatures can verify that an email genuinely came from the stated sender, though this requires both parties to implement the system.

What to Do If You Suspect Fraud

If your verification process reveals a fraudulent email:

1. Do not respond to the fraudulent email or let the sender know you’ve discovered the fraud
2. Preserve evidence: Save the email, headers, and all related communications
3. Notify your trading partner: Alert them that someone is impersonating them
4. Report to authorities: File a police report and contact relevant cybercrime units
5. Review your security: If they’re targeting your trading partners, your systems may also be at risk
6. Consult legal counsel: Contact attorneys like Atlas Legal who specialize in international fraud cases

Atlas Legal’s experience shows that even discovering an attempted fraud (without falling victim) provides valuable information about your security vulnerabilities. Companies that take near-miss incidents seriously and strengthen their procedures accordingly become much harder targets for future attempts.

7. Email Security Enhancement Measures

Core Answer

Experts recommend a multi-layered approach to email security combining technical measures, procedural controls, and user training. The five critical technical measures are: strengthening company mail server security, implementing regular password changes, prohibiting shared accounts, blocking foreign IP logins, and enabling two-factor authentication with login notifications. Atlas Legal advises all clients to implement these measures comprehensively rather than selectively.

1. Strengthen Company Mail Server Security

The first recommendation from experts is enhancing the company mail server’s security. While this requires IT professional assistance, companies should ensure these basic elements are addressed:

• Apply Latest Security Patches: Ensure all server software and security systems are updated to the latest versions. Hackers often exploit known vulnerabilities in outdated systems.
• Firewall Configuration Review: Properly configured firewalls can prevent unauthorized access attempts to mail servers.
• Enhanced Spam Filters: Modern spam filters can identify and block many phishing attempts before they reach users’ inboxes.
• Automatic Blocking of Suspicious Attachments: Configure systems to automatically block or quarantine attachments of types commonly used to deliver malware (.exe, .scr, suspicious .zip files).
• Phishing Detection Systems: Implement systems that can identify common phishing email patterns and warn users or block delivery.

Atlas Legal recommends that companies engage professional IT security firms to conduct regular audits of mail server security. The cost of such audits is minimal compared to potential fraud losses.

2. Regular Email Account Password Changes

Experts recommend changing email account passwords regularly. Atlas Legal advises changing passwords at least every three months and following these password management principles:

• Combination Requirements: Use a combination of uppercase letters, lowercase letters, numbers, and special characters
• Minimum Length: At least 12 characters (longer is better)
• Unique Passwords: Different from passwords used for other websites or systems
• Avoid Predictable Information: Don’t use birthdays, phone numbers, or other easily guessed information
• Password Management Tools: Consider using reputable password management software to generate and store complex passwords securely

Why This Matters

Even if a password is somehow compromised, regular changes limit the window of opportunity for hackers to exploit that access. Additionally, password complexity makes automated cracking attempts ineffective.

Implementation Strategy

Atlas Legal recommends establishing a company-wide password change schedule. All employees should change passwords on the same regular schedule (e.g., the first day of each quarter) to ensure no accounts are neglected.

3. Prohibit Shared or Generic Accounts

This is an area experts specifically warn against. When multiple employees share a single email account, security becomes very weak and accountability is lost.

Problems with Shared Accounts

• If the account is compromised, it’s difficult to determine how the breach occurred
• Multiple people knowing the password increases the risk of password exposure
• When employees leave the company, you can’t simply close one account without affecting others
• It’s impossible to track which employee took which actions
• Security measures like two-factor authentication become impractical

Best Practice

Atlas Legal recommends that each employee receive an individual email account. When employees leave the company, their accounts should be immediately disabled. For accounts that need to represent departments (like sales@company.com), configure them as distribution lists or aliases that forward to individual accounts, rather than shared login accounts.

4. Block Foreign IP Login Capability

One of the most effective technical measures recommended by experts is blocking email logins from foreign IP addresses.

The Logic

Most Korean companies only access their email from within South Korea. If email access is attempted from a foreign country (where many hackers are based), this is likely unauthorized access.

Implementation

Many email systems allow administrators to restrict logins to specific geographic regions or IP address ranges. Configure the system to only allow logins from Korean IP addresses (or from the countries where your company has legitimate offices).

Handling Business Travel

For employees who travel abroad frequently:

• Provide VPN access so they can connect through a Korean IP address
• Temporarily whitelist the specific country’s IP range during the travel period
• Use mobile apps that authenticate differently than web access

Atlas Legal has seen cases where this simple measure prevented account compromise because the hacker was physically located in a foreign country and couldn’t access the account even with a stolen password.

5. Enable Two-Factor Authentication (OTP) and Login Notifications

The final measure experts strongly recommend is implementing two-factor authentication combined with login notification systems. Atlas Legal considers this among the most important security measures.

Two-Factor Authentication (2FA/OTP)

Two-factor authentication requires not just a password (something you know) but also possession of a physical device (something you have) to log in. Common implementations include:

• SMS codes sent to registered mobile phones
• Authenticator apps (Google Authenticator, Microsoft Authenticator) that generate time-based codes
• Physical security keys
• Biometric verification on registered devices

Why This Works

Even if a hacker obtains your password through phishing or keylogging, they cannot log in without also having access to your physical phone or security key. This dramatically increases security.

Login Notifications

Configure email systems to send alerts whenever an account is accessed. These notifications should include:

• Date and time of login
• IP address of login
• Geographic location (if available)
• Device type used

Early Detection

If you receive a login notification for an access you didn’t make, you can immediately:

• Change your password
• Report the incident to IT security
• Review recent emails to see if anything was sent from your account
• Alert trading partners that your account may have been compromised

This early detection can prevent fraud before it succeeds. In one case Atlas Legal handled, a client received a login notification from China at 3 AM Korean time. They immediately changed passwords and discovered that hackers had been preparing to send fraudulent payment instructions but hadn’t yet done so. The early warning prevented the fraud.

Additional Security Measures

Beyond the five primary measures, experts recommend:

Email Encryption

For highly sensitive communications, consider email encryption systems that ensure only intended recipients can read messages.

Regular Security Audits

Conduct quarterly reviews of email security logs looking for unusual access patterns or login attempts.

Incident Response Plan

Develop and document procedures for responding to suspected account compromises so everyone knows what to do immediately.

Backup Email Systems

Consider maintaining backup communication channels (like messenger apps with end-to-end encryption) for emergency verification if primary email is compromised.

Implementation Priority

If implementing all measures simultaneously is not feasible, Atlas Legal recommends this priority order:

1. First Priority: Two-factor authentication – provides immediate, substantial security improvement
2. Second Priority: Prohibit shared accounts – prevents accountability loss
3. Third Priority: Block foreign IP logins – stops many external attacks
4. Fourth Priority: Regular password changes – reduces window of compromise
5. Fifth Priority: Server security enhancement – provides comprehensive protection

However, experts emphasize that all five measures should eventually be implemented for comprehensive protection. Each measure addresses different vulnerabilities, and layered security provides the best protection.

8. Immediate Response Procedures When Fraud Occurs

The Golden Time is 24 Hours

Based on Atlas Legal’s experience, the window for potentially recovering funds from international wire transfer fraud is 24 hours. International wire transfers typically take 2-3 days to move from a Korean bank through intermediary banks (often in the US or Europe) to the final destination bank. If you can freeze the account or stop the transfer before the hacker withdraws the funds, recovery is possible. After funds are withdrawn and dispersed, recovery becomes extremely difficult or impossible.

Experts also emphasize the critical importance of immediate response. Every hour of delay significantly reduces the probability of recovery.

Step 1: Obtain Confirmation Documents from Trading Partner

The first action Atlas Legal recommends is obtaining written confirmation from the legitimate trading partner documenting these facts:

• The account you wired funds to is not used by the trading partner
• The trading partner did not receive the payment
• The person who purportedly requested the account change is not an employee of the trading partner
• The email domain used is not owned or used by the trading partner

This documentation is crucial for subsequent criminal complaints, civil litigation, and insurance claims. If email confirmation is all that’s immediately available, get that first and request formal documentation to follow.

Step 2: Immediately Contact the Remitting Bank

This is the most critical immediate action Atlas Legal emphasizes. Contact the Korean bank you used to send the wire transfer and request cancellation or recall of the transfer. Experts also recommend this as the top priority.

Why This Matters

International wire transfers go through multiple stages: “Korean bank → intermediary bank (often US or European major bank) → destination country bank.” If the funds are still at the intermediary bank stage, there may be a possibility of recall. The longer you wait, the further along the chain the money moves.

Information to Provide the Bank

When contacting the bank, have this information ready:

• Date and time of wire transfer
• Transfer amount
• Recipient account details (even though fraudulent)
• Wire transfer reference number
• Documentation proving fraud (confirmation from real trading partner)

What the Bank Can Do

The bank can attempt to contact intermediary banks to stop or recall the transfer. Success depends on how far the funds have progressed. Some banks have “recall of funds” procedures specifically for fraud cases, though success rates vary.

Step 3: File Police Report in Korea

Atlas Legal recommends immediately filing a criminal complaint with Korean police. Prepare these documents:

• Contract with trading partner
• Complete email exchange history
• Wire transfer documentation
• Confirmation from legitimate trading partner (Step 1)
• Comparison of fraudulent vs. legitimate invoices

Why File in Korea

Even though the crime may have been committed abroad, filing in Korea:

• Creates an official record of the crime
• Enables Korean police to request international cooperation
• Provides documentation for insurance claims or legal proceedings
• May trigger investigation of domestic aspects of the crime

International Cooperation

Korean police can request cooperation from law enforcement in other countries through international channels. However, this process is typically slow, and actual recovery through criminal proceedings alone is rare.

Step 4: Immediately Engage Local Law Firm in Destination Country

This is what Atlas Legal considers the single most important step for potential recovery. Experts also emphasize the critical value of local legal expertise.

Why Local Counsel is Essential

Local attorneys in the country where funds were sent can:

• File emergency account freeze applications with local courts
• Communicate directly with local police and financial authorities
• Prepare all documents in the local language
• Navigate local legal procedures they’re familiar with
• Respond immediately without time zone delays

Emergency Freeze Procedures

Most countries have legal mechanisms for emergency freezing of accounts when fraud is suspected. Local attorneys know how to invoke these procedures quickly. For example:

• In Germany: Arrest warrant application to freeze assets
• In China: Property preservation measures
• In Vietnam: Temporary emergency measures
• In United States: Ex parte temporary restraining orders

These are civil procedures that can often be accomplished within hours or days—much faster than criminal investigations.

Atlas Legal’s International Network

Atlas Legal maintains partnerships with law firms in over 70 countries, enabling immediate coordination when fraud occurs. We have successfully coordinated urgent responses in Germany, China, Vietnam, and other jurisdictions.

In the German case described earlier, our Frankfurt partner firm filed an emergency freeze application within 12 hours of being engaged. The court granted the order, freezing approximately 60% of the funds before the hacker could withdraw them.

Effectiveness of Local Law Firm Engagement

In one case Atlas Legal handled, the victim discovered fraud and contacted us 12 hours after the wire transfer. We immediately engaged our German partner firm. Key timeline:

• Hour 0: Client discovers fraud, contacts Atlas Legal
• Hour 2: We brief German partner firm (accounting for time zone)
• Hour 8: German firm drafts and files emergency freeze petition
• Hour 12: German court issues freeze order
• Hour 15: Bank executes freeze—60% of funds still in account

Without local counsel, attempting to navigate German legal procedures from Korea would have taken days or weeks—by which time all funds would have been withdrawn.

What Happens After Initial Response

After these immediate emergency measures:

Criminal Process

• Police investigation in relevant countries
• Potential identification and prosecution of perpetrators
• Asset forfeiture and return procedures (if criminals are caught)

Civil Process

• If funds are frozen, legal proceedings to establish ownership
• Return of funds to rightful owner through court order
• Potential civil suits against hackers (if identifiable) or negligent parties

Insurance Claims

• If you have cybercrime insurance, file claims
• Provide all documentation from Steps 1-4
• Cooperate with insurance investigation

Realistic Expectations

Experts warn, and Atlas Legal’s experience confirms: even with perfect immediate response, recovery is not guaranteed. Success depends on:

• How quickly fraud was discovered
• How quickly you responded
• Whether funds are still in the fraudulent account
• The legal system of the destination country
• Whether local banks cooperate
• Luck and timing

Statistics from experts show that in most cases, by the time fraud is discovered, funds have already been withdrawn and dispersed, making recovery impossible. This is why prevention (measures discussed in sections 4-7) is infinitely more valuable than attempted recovery after fraud.

However, when companies do respond within the 24-hour golden window and engage local legal expertise immediately, recovery of at least partial funds is possible. Atlas Legal has seen recovery rates ranging from 0% (when response was delayed) to 100% (when extraordinarily quick response prevented any withdrawal) to the 60% achieved in our German case.

9. Strategies for Utilizing Local Law Firms

Why Local Law Firms Are Necessary

International wire transfer fraud is inherently a transnational crime, and each country has different legal systems and procedures. As experts emphasize, each country has its own remedies for international wire transfer fraud.

Based on Atlas Legal’s experience, local law firms provide these crucial advantages:

• Emergency Court Measures: Can file account freeze applications and other emergency petitions with local courts
• Direct Communication with Authorities: Can directly contact local police and financial regulators
• Language Capability: Can prepare all documents in the local language quickly
• Local Procedural Knowledge: Understand and can navigate local legal procedures
• Time Zone Advantage: Can respond immediately without waiting for Korean business hours

Selection Criteria for Local Law Firms

When Atlas Legal needs to engage local counsel in emergency situations, we apply these selection criteria:

• Specialization: Experience in international wire transfer fraud or financial crimes
• Emergency Procedures Experience: Track record with urgent court applications
• English Communication: Ability to communicate effectively in English
• 24/7 Availability: Emergency contact capability
• Regulatory Connections: Established relationships with local financial authorities

Atlas Legal maintains relationships with vetted law firms in major countries precisely so we can respond immediately when emergencies arise.

Process for Coordinating with Local Law Firms

Atlas Legal’s typical coordination process in international wire transfer fraud cases:

Stage 1: Immediate Engagement

Upon receiving fraud notification from a client, we immediately contact partner firms in the relevant country. We account for time zones to reach them as quickly as possible using phone, email, or messaging services.

Stage 2: Information Transfer

We prepare and transmit comprehensive information packages to local counsel including:

• Timeline of events
• Wire transfer details
• Fraudulent account information
• Evidence of fraud
• Client authorization documents

We prepare English summaries to expedite communication and understanding.

Stage 3: Emergency Legal Action

Local counsel immediately takes action according to local law. This typically includes:

• Filing emergency account freeze petitions with courts
• Notifying local police of the fraud
• Contacting banks to request voluntary freezes pending court orders
• Filing any other available emergency measures

In most countries with clear fraud evidence, courts grant emergency freezes. The key is speed—filing before the hacker withdraws funds.

Stage 4: Follow-up Proceedings

After accounts are frozen, longer-term legal processes begin:

• Criminal investigations and prosecution
• Civil proceedings to establish rightful ownership of frozen funds
• Return of funds to victims through legal mechanisms

This stage can take months, but if funds are frozen, the hacker cannot access them, making recovery possible.

Real Case Example: German Coordination

In the German case previously described:

Friday 6 AM Korea Time: Client discovers fraud, contacts Atlas Legal

Friday 8 AM Korea Time: We contact Frankfurt partner firm (2 AM Frankfurt time – emergency contact)

Friday 10 AM Frankfurt Time: German attorneys begin drafting emergency petition

Friday 2 PM Frankfurt Time: Emergency petition filed with Frankfurt court

Friday 4 PM Frankfurt Time: Court issues provisional account freeze order

Friday 6 PM Frankfurt Time: Bank executes freeze—finds approximately 60% of funds still in account

The coordination succeeded because:

• Pre-established relationship enabled immediate engagement
• German attorneys understood local procedures
• Documents were prepared professionally in German language
• No time was wasted learning local systems
• German court was familiar with attorneys’ credibility

Atlas Legal’s International Network

Atlas Legal, located in Songdo, Incheon, specializes in corporate law, corporate disputes, corporate advisory, and corporate crime. We have particular expertise in international transactions and cross-border legal issues.

We maintain partnerships with law firms in over 70 countries worldwide, enabling immediate response when international wire transfer fraud occurs. Our network includes major business centers such as:

• United States (New York, Los Angeles, Chicago)
• Europe (London, Frankfurt, Paris, Amsterdam)
• China (Beijing, Shanghai, Guangzhou)
• Southeast Asia (Singapore, Vietnam, Thailand)
• Japan, Taiwan, Hong Kong
• Middle East (Dubai, Saudi Arabia)

This network allows us to respond to fraud incidents wherever they occur globally.

Cost Considerations

Engaging international counsel involves costs:

• Local attorney fees
• Court filing fees
• Translation costs
• Coordination expenses

However, Atlas Legal’s experience shows these costs are typically a small fraction of potential losses. In the German case, legal fees were approximately 5% of the recovered amount—a worthwhile investment compared to 100% loss if no action had been taken.

Some clients have cybercrime insurance that covers these legal costs. Atlas Legal can assist with insurance claims as part of our service.

Preventive Relationship Building

Experts and Atlas Legal recommend that companies engaged in significant international trade consider:

• Identifying key countries where you trade regularly
• Establishing relationships with law firms in those countries before problems occur
• Including emergency contact information in your fraud response plan
• Discussing potential fraud scenarios and response procedures in advance

Having these relationships established enables faster response if fraud occurs. Companies don’t need to retain foreign counsel on a continuous basis—simply having identified capable firms and emergency contacts provides enormous value in crisis situations.

Atlas Legal offers to facilitate these introductions for clients as part of our advisory services, leveraging our international network to help clients build their own emergency response capabilities.

10. FAQ

Atlas Legal, located in Songdo, Incheon, provides legal services in the areas of corporate law, corporate disputes, corporate advisory, and corporate crime (fraud, embezzlement, breach of trust, tax law, customs law). Based on expert recommendations for preventing hacking trade fraud, we support companies engaged in international trade throughout the entire process—from establishing email hacking prevention systems to emergency response when fraud occurs. We have established networks with law firms in major countries worldwide, enabling immediate coordination with local legal experts for account freezes, criminal complaints, and civil litigation when international wire transfer fraud occurs. We have successfully handled international wire transfer fraud cases in Germany, China, Vietnam, and other countries, and also support preventive system establishment including drafting international contracts with no-account-change policies, email security advisory, and international transaction risk management.