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FACC, an Austrian aircraft-parts maker, dismissed CEO Walter Stephan in May 2016 after an employee was tricked by an email impersonating company leadership into transferring a large sum. The board said it considered Stephan’s duties severely violated in relation to the incident; that was its stated governance rationale, not an allegation that he took part in the fraud.
How the email scam worked
In January 2016, a FACC employee reportedly received email instructions from someone posing as a senior company leader and transferred money. The message was described as spoofed and framed as an urgent business transaction, a pattern commonly called business email compromise (BEC), “CEO fraud,” or a “Fake President” scam. Contemporary coverage also used “whaling” to describe the executive impersonation.
Reports say the funds were moved to overseas accounts, but they do not establish the original email’s full contents, whether any account was compromised, how payment approvals worked, or which safeguards were present or bypassed. The reporting supports an email-based impersonation and payment fraud; it does not establish a malware infection or network intrusion. AFP’s report published by SecurityWeek and Softpedia’s contemporaneous account describe the incident.
Why FACC removed its CEO
In May 2016, FACC’s supervisory board removed Stephan with immediate effect and appointed Robert Machtlinger interim CEO, according to a report by Infosecurity Magazine, which reproduced the board’s statement: “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’.”
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This explains the board’s stated accountability decision after the loss. The cited reporting does not accuse Stephan of participating in the scam, and the board’s statement is not an independent legal finding.
How much money was involved?
Contemporaneous accounts give different estimates of the amount transferred. Other figures refer to money recovered, the cost attributed to the scam in a financial year, and FACC’s overall pretax result. They are not interchangeable.
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| Measure | Reported figure | What the source says |
|---|---|---|
| Estimated amount transferred or stolen | Around €50 million ($55.7 million) | AFP, as published by SecurityWeek, reported “around 50 million euros ($55.7 million).” |
| Estimated amount transferred or stolen | €52.8 million ($56.79 million) | Softpedia reported this higher estimate. |
| Amount recovered | €10.9 million | Softpedia reported that this amount was recovered. |
| Incident cost in FACC’s 2015/16 business year | €41.9 million | AFP, as published by SecurityWeek, reported this cost. |
| FACC’s pretax result | €23.4 million loss | AFP, as published by SecurityWeek, reported this annual pretax loss. |
The reports do not reconcile the two estimates of the amount stolen or explain how the recovered amount relates to the accounting cost. The €23.4 million pretax loss is the company’s broader annual result, not another estimate of the scam’s cost. FACC’s customers at the time included Airbus, Boeing, and Rolls-Royce, according to contemporaneous coverage.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What businesses can take from the incident
The case illustrates why an email that appears to come from an executive should not, by itself, authorize a high-value or unusual payment. The following are general safeguards for payment processes; the available reports do not establish whether FACC used them or lacked them.
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- Verify through a trusted, separate channel. Call a known number or use an established internal contact route, rather than replying to the message or relying on contact details supplied in it.
- Require independent approval. Have another authorized person review unusual transfers and changes to payment instructions before funds are sent.
- Pause on urgency or secrecy. Treat pressure to act immediately, bypass routine procedure, or keep a transaction confidential as a reason to verify, not as a reason to skip checks.
- Make the process clear. Document who can request, verify, and approve payments, and ensure staff know how to report a suspicious instruction.
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