How could a $122 million fraud have been prevented with the OWIS system?

When tech giants like Facebook and Google lost $122 million to a sophisticated fake invoice scam, the story became an example of how important it is to have robust processes and technologies in place to prevent similar incidents. The Evaldas Rimasauskas scam exposed key weaknesses in invoice management, and below we will analyze in detail how it happened and how OWIS could help prevent such situations.

Fraud details: What happened?

1.⁠ ⁠Scammer and method:

• Rimasauskas sent invoices that appeared to come from the reputable company Quanta Computer.

• He used fake email addresses and forged contracts to convince companies that the invoices were authentic.

2.⁠ ⁠Lack of checks:

• Invoices passed without further verification, relying on manual processes and human judgment.

• There was no centralized system for validating suppliers and their invoices.

3. Lack of transparency:

• The bank accounts to which payments were made did not match the actual supplier data, which was not noticed due to the lack of integrated verification tools.

4.⁠ ⁠Result:

• The scammer was able to extract $122 million before the fraud was discovered by internal audits and external investigations.

How would OWIS prevent this kind of fraud?

1.⁠ ⁠Automated validation of suppliers and invoices:

• OWIS solution: OWIS enables automatic verification of supplier authenticity through integration with databases and ERP systems. Each invoice is entered into the system where automatic checks of key data such as supplier identification number, account numbers and history of previous transactions are enabled.

• Application in this case: OWIS is able to identify discrepancies in bank accounts and supplier data, preventing the approval of payments for invoices that have not passed validation.

2. Transparency through workflow and audit trails:

• OWIS solution: Every step in the invoice processing process is recorded and documented in OWIS, providing a complete audit trail. This includes who reviewed the invoice, who approved the payment, and when it was done.

• Application in this case: The lack of transparency was a key issue. OWIS would provide clear traceability of all steps and alert on irregularities, such as duplicate invoices or suspicious changes.

3. ⁠Multi-level approval:

• OWIS solution: OWIS allows for the definition of multi-layered verification mechanisms. For example, invoices above a certain amount require approval from senior management or more than one employee.

• Application in this case: Fraudulent invoices for high amounts would automatically trigger additional layers of approval, thus preventing carelessness or decisions made by a single employee.

4. Centralization of the process:

• OWIS Solution: OWIS centralizes all invoice management processes, reducing fragmentation and reliance on multiple departments or unrelated tools.

• Application in this case: Centralization would prevent information loss between different departments, which is one of the factors that enabled fraud.

Here are all the ways OWIS can help with managing incoming invoices.

Key Lessons: Why is OWIS the right solution?

This fraud is not only the result of sophisticated techniques by fraudsters, but also weaknesses in the processes and technologies of the companies targeted. OWIS is designed to address such weaknesses through:

• Fully transparent and traceable processes.

• ⁠Automatic data checks and validation.

• Customizable workflows for different invoice types.

• Integration with all key tools and databases.

In a world where fraudsters take advantage of every opportunity, a reliable and innovative solution like OWIS can make the difference between a successful business and catastrophic financial losses.