Shipping company loses $1.8m from fraudulent payments in email scam

The Singapore High Court has dismissed a claim by Major Shipping & Trading Inc against Standard Chartered over four payments totalling $1.84m, which were made by the bank following the receipt of email instructions.

An unknown third party accessed the client’s email account in an apparent “whaling” scam. Major Shipping & Trading is now appealing the case.

Major Shipping & Trading is a British Virgin Islands incorporated company involved in the trading and shipping of cement clinker. It is owned by Molla Mohammad Majnu and Mohammed Jahangir Alam. According to court documents for transactions under an account opened with Standard Chartered in 2012, Bangladesh landline telephone numbers, and two Singapore telephone numbers, were provided as contacts for authorized persons to the account, as well as Majnu’s email – a Yahoo email account.

Between June 17th and June 26th 2013 the bank received six outward telegraphic transaction instructions from Majnu’s email in the form of remittance application forms. The instructions bore signatures that were consistent with Majnu’s specimen with the bank, and the bank attempted to call the telephone numbers given for the first four transactions. All but one call went unanswered. On the call that was answered the bank officer was asked not to disturb the person who answered.

The first-to-fourth payments totalling $1.84m were made by the bank between 17th and 24th of June. Instructions for the fifth and sixth payments totalling $2.66m were not made, due to insufficient funds in the account. Majnu stated that he did not send the four instructions for the payments between 17th and 24th June.

Evidence pointed to a third party accessing Majnu’s Yahoo email account. Majnu ignored two SMS texts on 18th June that contained verification codes from Yahoo, which he claimed he did not understand.

Justice Kannan Ramesh dismissed the claim, finding that the bank was not negligent and therefore not liable for the claim.