Authored by
Darren S. Teshima and
Harry J. Moren
Insurers' recalcitrance to providing coverage for the
"Business E-mail Compromise" (BEC) scam is
a topic we've frequently discussed. On Monday, the Ninth
Circuit heard oral argument in a BEC coverage action, Taylor
& Lieberman v. Federal Insurance Company,
a California case we've previously described.
The fraudster in that case sent spoofed e-mails in 2012 to an
accounting firm purporting to be from one of the firm's
clients. At the "client's" request, the accounting
firm executed two wire transfers from the client's bank
account, over which the firm had power of attorney, in amounts just
under $100,000 each to banks in Malaysia and Singapore. The firm
finally detected the scheme when it called the client for
confirmation after receiving a third e-mail requesting another
transfer of $128,000 to Malaysia. The accounting firm was able to
recover most of the first wire transfer but nothing from the
second,
