Published in Finance

GR software firm specializing in wire transfer fraud protection raises $12.5M

BY Monday, May 16, 2022 02:56pm

CertifID LLC, a Grand Rapids company that developed software to protect money wire transfers in real estate transactions, has closed on $12.5 million in growth capital.

The investment from Minneapolis-based Arthur Ventures, which invests in business-to-business software companies, will enable CertifID “to double down on hiring and retaining exceptional talent that is passionate about building industry-leading technology to protect businesses and unsuspecting home-buyers from fraud,” co-founder and CEO Tyler Adams said.


“Fraud is at an all-time high as global criminal networks prey on the shift to virtual communications and electronic transfers ignited during the Covid-19 pandemic. Our team has worked tirelessly to educate and empower businesses and consumers on the threat of fraud, but there is more work to do,” Adams said. “This investment will enable us to significantly expand our reach as we look to protect every real estate transaction.”

Adams founded CertifID in 2017 with partners Thomas Cronkright II and Lawrence Duthler, both of whom were owners and founders of Grand Rapids-based Sun Title that 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 that hundreds of title companies, law firms, and underwriters now use its software.

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

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

The FBI’s most recent annual Internet Crimes Report counted nearly 20,000 business email compromise complaints last year that cost victims nearly $2.4 billion.

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

“Now, fraudsters are using virtual meeting platforms to hack emails and spoof business leaders’ credentials to initiate the 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 last two years led to the emergence of newer scams that seek to exploit the reliance on virtual meetings by compromising the email of an employer or executive to request employee participation.

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

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Read 1060 times Last modified on Monday, 16 May 2022 17:21