Technology / Ubiquiti Networks victim of $46.7 million fraud

Ubiquiti Networks victim of $46.7 million fraud

Wireless product maker Ubiquiti Networks has been defrauded $46.7 million after fraudster’s targeted employees in the finance department and duped them into sending money to an outside entity.

Online Fraud

In a SEC filing, it was revealed: “The incident involved employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department.

“This fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties.

“As soon as the Company became aware of this fraudulent activity it initiated contact with its Hong Kong subsidiary’s bank and promptly initiated legal proceedings in various foreign jurisdictions.

“As a result of these efforts, the Company has recovered $8.1 million of the amounts transferred. Furthermore, an additional $6.8 million of the amounts transferred are currently subject to legal injunction and reasonably expected to be recovered by the Company in due course.

“The Company is continuing to pursue the recovery of the remaining $31.8 million and is cooperating with U.S. federal and numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation.

“The Company may be limited in what information it can disclose due to the on going investigation.

“The ultimate amount of the loss will depend, in part, on the Company’s success in recovering the funds. The Company may not be successful in obtaining any insurance coverage for this loss.

“The Company currently believes this is an isolated event and does not believe its technology systems have been compromised or that Company data has been exposed.

“While this matter will result in some additional near-term expenses, the Company does not expect this incident to have a material impact on its business or its ability to fund the anticipated working capital, capital expenditures and other liquidity requirements of its on going operations.”

The Audit Committee of the Company’s Board of Directors conducted an independent investigation into this matter with the assistance of outside advisors.

There was no evidence that its systems were penetrated or that any corporate information, including financial and account information, were accessed. The investigation found no evidence of employee criminal involvement in the fraud.

Photo © GotCredit (CC BY 2.0). Cropped.


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