Poland: How to lose a million in a week

Tomasz Konopka	Borys D Sawicki

Ms X, an accountant at company A, domiciled in country B, receives a phone call. Someone on the other side of the line explains that he is calling her in connection with a new project run by company A in which her assistance will be required. Shortly after, Ms X receives an e-mail from a top level manager of company A (whom she has never met personally), Mr Z, referring to that call and repeating the message. Mr Z explains the relevance of the project to company A and stresses the importance of Ms X's involvement for its success. He also requests Ms X to keep the matter secret and to work on the assignment solely with him. Ms X feels honoured. Not long after the call, Ms X receives her first task in the project: she has to wire €450,000 ($613,000) from company A's bank account to an account of a company (unknown to her) in Country C. The following days bring several similar requests; Ms X wires the monies and Mr Z praises her assistance and encourages her to continue, as the project is about to be successfully completed. But before the successful completion arrives, Ms X's direct superior finally notices the transfers from the bank account of company A and demands explanations. A few hours later, it is clear that Mr Z (the real one) has never contacted Ms X nor instructed her to make any money transfer. At which time, however, the monies are already in a bank account in country C.

The story is neither unrealistic nor exceptional – frauds similar to the one depicted above are occurring more and more often. There are several reasons for this, the shift towards electronic means of communication in lieu of direct (face to face) contacts being one of them. Loosened relations between staff and managers and properly employed social engineering generate opportunities for those willing to take advantage of the dangerous mix created by modern technology and people's gullibility. While there is no way (and no need) to stop technological progress, companies assisted by experts, including lawyers experienced in similar matters, may undertake various precautionary steps to mitigate the threat.

If the situation described above has already happened to you or your company, you may wish to consider the following steps.

You should immediately contact your bank and notify it of the fraudulent transactions. Although monies have most likely already left your account, there is good chance that your bank may alert the recipient's bank and make some progress on that end.

For example, under applicable Polish anti-money laundering regulations (the Polish Act on the prevention of money laundering and financing of terrorism of November 16 2000), banks are required to register transactions exceeding €15,000; if the circumstances of the transaction indicate that it may relate to a money laundering operation, the transaction should be registered regardless of its value. More importantly, a bank which receives an instruction to perform a transaction or is about to perform a transaction, or simply possesses information about the intention to perform a transaction, which may reasonably be expected to be in connection with a money laundering offence, should notify the Polish anti-money laundering (AML) authority and withhold the transaction for 24 hours. The Polish AML authority may – within these 24 hours – decide to withhold the transaction or block the bank account for another 72 hours, in which case it should notify the relevant prosecutor about a possible money laundering offence. The prosecutor may then decide to withhold the transaction or block the account for a further three months; the withholding of the transaction or blockade of the account will expire unless the prosecutor decides to impose a temporary injunction in the investigation proceedings (under applicable provisions of the Polish Code of Criminal Proceedings).

[To be continued in the September issue of the magazine.]

Tomasz Konopka and Borys D Sawicki

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