FACC, an Austrian-based manufacturer of airplane parts, has fired its CEO, Walter Stephan, after this past January he fell victim to an email scam that defrauded the company of €52.8 million ($56.79 million).

The company made the announcement yesterday, along with its 2015-2016 financial year results, where it stated it managed to recoup €10.9 million of the stolen funds.

Nevertheless, the company reported total losses of €23.4 million for the whole financial year. A big chunk in this was the €40.9 million loss from the online scam incident.

Stephan was the company’s long-time CEO

Stephan has been the company’s CEO for the past 17 years, but a moment of negligence this past January cost him his cozy and well-paid job.

The FACC CEO fell for what’s called a CEO Fraud incident, or Bogus Boss, Fake President, Whaling Attack or BEC (Business Email Scam). In these scams, one of the company’s employees or executives receives a spoofed email made to look like it’s coming from one of its bosses or fellow employees asking for urgent payment of a business transaction.

The scam works when employees break protocol and don’t double-check via phone call or in person if the sender has requested to transfer large amounts of money.

FACC declined to reveal details of how the scam happened, but in February, the company also fired its CFO (Chief Financial Advisor). Robert Machtlinger will be replacing Stephan as FACC’s new CEO.

After news of the scam broke in the press, FACC shares dropped on the stock market from €6.33 to €5.46 per share. After yesterday’s announcement, share prices got a nice 5% jolt.

Most of the money went to bank accounts in Slovakia and Asia

A subsequent investigation revealed that most of the stolen money was siphoned to bank accounts in Slovakia and Asia.

Just four days after the FACC scam, a Belgian bank also announced it lost €70 million ($78.25 million) in a similar scam.

Below is the company’s short statement regarding Stephan’s departure.

  In the supervisory board meeting, held on May 24, 2016, Mr. Walter Stephan (CEO) was revoked by the supervisory board as chairman of the management board of FACC AG with immediate effect for important reason. The supervisory board came to the conclusion, that Mr. Walter Stephan has severely violated his duties, in particular in relation to the “Fake President Incident”. Mr. Robert Machtlinger was appointed as interim CEO of FACC AG.  

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