Wire Transfer Fraud Protection Software Company GR Raises $12.5M

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CertifID LLCa Grand Rapids company that developed software to protect money transfers in real estate transactions, closed $12.5 million in growth capital.

Investment from Minneapolis-based Arthur Ventures, which invests in B2B software companies, will allow CertifID “to double its recruitment and retain exceptional talent passionate about creating cutting-edge technologies to protect businesses and buyers of unsuspecting house”. of fraud,” said co-founder and CEO Tyler Adams.

Tyler Adams
COURTESY PHOTO

“Fraud is at an all-time high as global criminal networks feed on the shift to virtual communications and electronic transfers triggered during the Covid-19 pandemic. Our team has worked tirelessly to educate and hold businesses and consumers accountable about the threat of fraud, but there is still work to be done,” Adams said. “This investment will allow us to significantly expand our reach as we seek to protect every real estate transaction.”

Adams founded CertifID in 2017 with partners Thomas Cronkright II and Lawrence Duthler, both owners and founders of Grand Rapids-based Sun Title, which was hit two years earlier by a social engineering scam resulting in wire fraud that cost the company nearly $200,000.

CertifID executives say the company has protected more than $150 billion in transactions and hundreds of title companies, law firms and underwriters now use its software.

The company’s software validates parties to a transaction to prevent business email compromise scams and provides up to $1 million in insurance on a transaction. The company said it worked with the US Secret Service to help 190 fraud victims recover nearly $50 million.

“CertifID addresses the biggest threat to the real estate industry,” Patrick Meenan, general partner at Arthur Ventures, said in an announcement about the investment. “They have developed a unique suite of products to prevent fraud and a quick-response recovery team to support businesses and consumers who experience loss. We are thrilled to support such an impressive and mission-driven team.

The FBI’s latest annual Internet Crimes Report tallied nearly 20,000 business email compromise complaints last year, costing victims nearly $2.4 billion.

The scam “evolved from a simple hacking or spoofing of work and personal email accounts and a request to send wire transfers to fraudulent bank accounts,” according to the FBI. The schemes “historically involved emails from compromised vendors, W-2 requests for information, targeting of the real estate industry, and fraudulent requests for large amounts of gift cards.”

“Now, fraudsters are using virtual meeting platforms to hack emails and spoof credentials of business leaders to initiate fraudulent wire transfers. These fraudulent wire transfers are often immediately transferred to cryptocurrency wallets and quickly dispersed, making recovery efforts more difficult,” according to the FBI.

The pandemic of the past two years has led to the emergence of new scams that seek to exploit the reliance on virtual meetings by compromising an employer or executive’s email to request employee attendance.

“In these meetings, the fraudster would insert a still image of the CEO with no audio, or a ‘deep fake’ audio through which the fraudsters, acting as corporate executives, would then claim that their audio/video was not working properly. “, said the FBI. reported in the 2021 Internet Crimes Report. “The fraudsters would then use the virtual meeting platforms to directly ask employees to initiate wire transfers or use the executives’ compromised email to provide wiring instructions.”

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