Cyber Attacks Hit Wealthy Mayfair Art Dealers Causing Big Losses

A Cyber attack that has hit a group of wealthy Mayfair art dealers have caused them a loss of over £1 million. Reports are that the attack has impacted at least nine galleries or individuals.

The Evening Standard reports- “A group of wealthy Mayfair art dealers have been hit by a cyber attack which has lost them up £1 million to hackers. At least nine galleries or individuals were affected, including Hauser & Wirth, and London-based dealers Simon Lee, Thomas Dane, Rosenfeld Porcini and Laura Bartlett.”

The Art Newspaper too has reported on the incident- “Hackers are stealing large sums of money from art galleries and their clients using a straightforward email deception. The Art Newspaper has so far identified nine galleries or individuals targeted by this scam. They include Hauser & Wirth, the London-based dealers Simon Lee, Thomas Dane, Rosenfeld Porcini and Laura Bartlett and, in the US, Tony Karman, the president of Expo Chicago.”

The Art Newspaper has also quoted an insurance broker representing insurance firm Hallet Independent saying that the sums lost by the galleries and painters range from £10,000 to £1m.

The Modus Operandi

It was basically an email scam that hit the galleries and their clients. The hackers would first hack into the email account of the art dealer. They would then monitor all correspondence and when a PDF invoice is sent to a client, it’s intercepted. A duplicate fraudulent one is then sent to the client, asking them to ignore the first mail and make the payment to the account given in the new mail. The unsuspecting client does so, not realizing that the second mail is a fraudulent one. The hackers, once they get the money transferred into the account, move it to avoid detection and then simply disappear. This technique they apply to intercept payments that galleries make to their artists and others as well. Moreover, since the criminals had access to the contact list of the galleries, the scan did spread quickly, via fraudulent emails that seemed to come from known sources.

The Impact

The impact of the cyber attack is really big. As already mentioned galleries and painters have lost sums ranging from £10,000 to £1m. The Art Newspaper had quoted insurance broker Adam Prideaux of Hallett Independent as saying, “I suspect the problem is a lot worse than we imagine.”

London-based art dealer Laura Bartlett, who got hit by the attack when she had mailed an invoice to a US collector to whom she had sold a group of works, was so shattered that she had to close her gallery. There are many others who have lost big money in this attack.

However some others, like Tony Karman of Expo Chicago, were able to realize that it was a case of cyber attack and hence were able to take precautionary steps. Some others, like the Swiss gallery Hauser & Wirth, with spaces in other cities like Zurich, London, New York, Los Angeles etc, acted swiftly and recovered their funds. Many have overhauled their invoicing procedures and even make their accountants confirm banking details with clients over the phone.