Newsletter
Google and Facebook were taken for a ride by a single clever fraudster to the tune of $100 million between them, and most of the details of the case have remained a mystery until now. The crime was perpetrated by Evaldas Rimasauskas of Lithuania. Rimasauskas was able to fleece both companies by forging all sorts of documents and other materials and authorizations that allowed him to accurately impersonate tech suppliers for the two companies and solicit huge payments. He was eventually caught and authorities even manged to return a good portion of the money that he stole, but the records were sealed to the public.
A lengthy investigation by Fortune brought the facts of the case to light. Rimasauskas allegedly avoided detection over the years the scam was taking place by distributing the money around to different banks throughout Europe. He impersonated Quanta Computer, a Taiwanese outfit established in 1988, which regularly sold bits and bobs to both Facebook and Google. While unnamed in the investigation, Quanta stepped forward to confirm that they were the company being impersonated, and said that the second party in the case was actually two parties; an international tech giant, and a social media provider. After questions were asked in private, “multiple sources” ended up naming Facebook and Google as the victims. Both companies eventually wound up coming forward and confirming that they had been victimized, and also that they had both managed to get back most of the funds that they paid out.
The implications of this event run deep. For starters, it serves as proof that a properly launched social engineering assault can compromise even the most secure companies. The second, bigger implication speaks to a term known as a “material event” in the business world. A material event is something that causes a significant change in the way the company does business, or something that has deep implications for the company. Reports that Yahoo had been hacked, for example, were a material event. When a material event occurs, companies are obligated to let shareholders know. Though they aren’t obligated to tell the public in most cases, material events are often revealed via press releases. In light of the facts of the case coming out, debate rages as to whether the crime reported would be considered a material event, and indeed what the criteria are in general for a material event. Google and Facebook both kept their mouths shut about the case until the facts were dragged into the light, and when asked, both companies said that they did not see the theft as a material event.