Efficient Services Escrow, Now Defunct, Sues Its Former Bank Over $1.5 Million Cyber Heist
A defunct Huntington Beach escrow firm that was forced out of business by a $1.5 million cyber heist last year is suing its former bank in Orange County Superior Court for allegedly failing to protect its money. Efficient Services Escrow claims First Foundation Bank's security procedures were shoddy, especially when it came to processing three fraudulent international wire transfers totaling $1,558,439 between December 2012 and February 2013.
An investigation later revealed Efficient Services Escrow's funds were transferred to an account in Russia and another in a northern region of China on the Russian border, reports Krebs on Security.
The company was able to recover the wire to Russia, which totaled $400,000 and change, but the two transfers to China totaling $1.1 million are long gone.
The state shut Efficient Services down after the company failed to meet a three-day deadline to replace the stolen funds. All nine company employees were then let go. A lawyer later appointed to be Efficient's receiver sued First Foundation in hopes of recovering the $1.1 million.
First Foundation filed an incident report about the theft that states Efficient had previously performed international wire transfers so the bank found nothing unusual about the Chinese transactions. But the incident report also mistakenly blamed Efficient's controller for the fraud instead of international cyber thieves.