Imagine receiving an urgent email from your company’s CEO demanding a confidential and immediate wire transfer, and warning of dire consequences if delayed. You act fast, only to find out later that the email never came from your boss at all. This unsettling scenario is playing out in businesses worldwide, costing companies millions.

As impersonation tactics grow increasingly convincing, it’s more important than ever to recognize the red flags and understand how these schemes unfold. In this article, you will learn the usual targets of CEO fraud, how to recognize its signs, and how you can help protect your organization from this cyberthreat.

What is CEO fraud?

CEO fraud is a form of spear phishing where cybercriminals send a targeted email that impersonates a company’s chief executive officer or another high-level executive to manipulate an employee into transferring funds or disclosing sensitive information. This is a specific and highly effective form of a broader category of attacks known as business email compromise.

The core of CEO fraud lies in exploiting the trust and authority associated with corporate leadership, with the primary goal of financial gain by tricking employees in finance or human resources departments into making unauthorized wire transfers to the criminal’s accounts. The CEO fraud definition also includes scams aimed at stealing valuable data, such as employee tax records or customer lists, which can then be sold or used for further fraudulent activities.

CEO fraud vs. whaling

While both CEO fraud and whaling are highly targeted social engineering attacks, they differ in their targets and objectives. CEO fraud involves a scammer impersonating a high-level executive to deceive an employee into executing unauthorized actions, like wiring money or sharing confidential data. The employee is the target of the deception.

In contrast, whaling is a form of phishing that directly targets the senior executives themselves—the whales or big fish. The goal of a whaling attack is to trick the executive into revealing their personal login credentials or sensitive corporate information, which can then be used to facilitate larger attacks.

Carefully crafted cybercrime

A CEO fraud attack is a carefully orchestrated con that leverages social engineering and technical tricks. The process usually begins with reconnaissance, where scammers study a company’s organizational chart, identify key personnel in the finance department, and learn the CEO’s communication style.

Next, they use email spoofing to make a message appear as if it’s coming directly from the executive’s real address. The fraudulent request itself is designed to bypass suspicion by emphasizing urgency and confidentiality. The attacker might claim they are handling a secret merger or an urgent tax payment that must be processed immediately and without discussion, pressuring the employee to act before they have time to think or verify the request.

A highly profitable scam

CEO fraud scams are becoming more common because they are incredibly profitable for cybercriminals and easier to execute in today’s digital world. Furthermore, the reliance on remote and hybrid models in the modern workplace has inadvertently created new vulnerabilities.

For instance, the old ways of quick, informal verifications—like walking over to your colleague’s desk—are no longer always possible, making it easier for a fraudulent, urgent-sounding CEO fraud email to succeed without being questioned.

→ Dig Deeper: The 9 Most Common Social Media Scams—and How to Spot Them Before It’s Too Late

The primary targets for CEO fraud

In CEO fraud, attackers carefully research and profile their victims, targeting individuals and departments who are most likely to have access to sensitive financial data or the authority to transfer money. Here are examples of primary targets for CEO fraud. If you work in any of these capacities, it is best to heighten your awareness and vigilance:

  • Finance and accounts payable staff: These employees are the most common targets because they have direct access to company funds and the authority to process payments and wire transfers. Attackers exploit their duty to act on executive requests, especially when framed as urgent.
  • Human resources (HR) professionals: Because HR departments hold a wealth of employee personal data, they have become prime targets for data theft. Scammers impersonate executives to request sensitive employee information, such as payroll lists, tax forms, and other personally identifiable information that can be used for identity theft and further fraud.
  • Executive and administrative assistants: These individuals work closely with high-level executives and are often tasked with handling logistical and financial matters on their behalf, such as booking travel or purchasing supplies. Scammers target them with requests for gift cards or to handle small, seemingly legitimate payments that turn out to be fraudulent.
  • New or junior employees: Newer staff members may be less familiar with company payment protocols and more eager to appear responsive and helpful. Cybercriminals prey on this lack of experience, hoping the new employee will fulfill a fraudulent request without questioning its legitimacy.

Recognize the red flags of a CEO impersonation scam

As a CEO email scam is carefully crafted to pressure an employee into panicking and making a mistake, a cool, clear-thinking approach and vigilance are your best defense against it. By learning to recognize the subtle and not-so-subtle red flags, you can stop these scams in their tracks. In addition, every employee, not just those in finance, must be trained to be aware of the following warning signs that often signal a malicious request.

  • High-pressure tactics: The email insists on extreme urgency or secrecy. Phrases like “I need this done now,” “handle this discreetly,” or “I’m in a meeting and can’t talk” are used to rush you into acting without proper verification.
  • Unusual request: The message asks for an action that is outside of standard company procedure. This could be a request to bypass a required approval step, send funds to an unfamiliar international account, or purchase gift cards.
  • Incorrect email details: Look closely at the sender’s email address. Scammers often use a display name that looks correct, but the actual address is a public domain like @gmail.com or a slightly misspelled version of your company’s domain such as CEO@compaany.com.
  • Changes in tone or style: The email’s language feels off. It might be overly formal or informal compared to the executive’s typical communication style, or it may contain unusual grammar and spelling errors.
  • Communication channel restriction: The sender explicitly states not to contact them by phone or speak to others in the organization about the request, claiming they are busy or that the matter is highly confidential. This is a tactic to prevent verification.

Beyond money: The true cost of real-world CEO fraud

CEO fraud is a global threat that has cost corporations billions in losses. These real-world cases show how even well-established organizations can fall prey to sophisticated social engineering tactics.

  • The $25-million deepfake video conference: In early 2024, a finance worker at a multinational firm was tricked into paying out $25 million after attending a video conference with people they believed were the company’s CFO and other senior staff. The “colleagues” on the call were actually deepfake recreations. The sophisticated attack was initiated by a suspicious email but gained credibility through the highly realistic video call, illustrating a frightening escalation in scam tactics.
  • Pathé film company’s €19-million loss: The Dutch division of the major film company Pathé lost over €19 million to a classic CEO fraud scam. Scammers impersonated executives from the French parent company, using spoofed emails to direct the Dutch CEO and CFO to make a series of urgent wire transfers for a fake “confidential” acquisition in Dubai. The attackers successfully used secrecy and authority to manipulate the executives into bypassing standard procedures.

While the initial financial loss from a CEO fraud attack can be devastating, the true cost extends far beyond the stolen funds. The aftermath often involves significant secondary expenses, including costly forensic investigations to determine the extent of the breach, legal fees, and potential regulatory fines if sensitive data was compromised.

Even more damaging is the erosion of trust. An attack can severely harm a company’s reputation among customers, partners, and investors, making it difficult to maintain business relationships. Internally, such an incident can destroy employee careers and morale, creating a culture of suspicion and blame that hinders collaboration and productivity. These cascading consequences are why proactive prevention is an essential business strategy.

The rise of deepfake and AI voice scams

The next evolution in CEO fraud involves the use of artificial intelligence to create highly convincing deepfakes. Cybercriminals no longer need to rely solely on text-based emails. With just a small audio sample from a public interview or social media post, they can clone an executive’s voice to use in a voice phishing (vishing) attack.

Imagine receiving a voicemail that sounds exactly like your CEO, urgently asking you to process a payment and to text them back for the details once it’s done. This emerging technology makes it harder to rely on traditional red flags like poor grammar or an unfamiliar tone. It underscores a critical truth: the most powerful defense is procedural.

No matter how convincing a message seems, always use out-of-band verification—such as calling the executive back on their official, known phone number—before taking any action on a sensitive request.

Protect your organization from CEO fraud

Effective fraud prevention requires a multi-layered and proactive security strategy that combines technology, robust processes, and ongoing employee education to shield company assets and sensitive data from increasingly sophisticated CEO fraud schemes. By following these best practices, you can help build a strong defense and cultivate a security-conscious culture where employees feel empowered to question suspicious requests.

  1. Follow the standard multi-channel verification: For any request involving fund transfers or data disclosure, you must strictly follow the standard verification protocol. This should involve confirming the request through a different communication channel, such as a direct phone call to a known number or an in-person conversation. Never use the contact information provided in the suspicious email.
  2. Attend regular employee training: When your company announces training about the dangers of CEO fraud and other phishing attacks, be sure to attend all sessions if possible, especially if you are in a finance, HR, or executive support role. Take note of the real-world examples of fraudulent emails to help you recognize red flags.
  3. Use advanced email security: Ensure that the modern email security solutions your company offers are deployed on your devices. These solutions will automatically flag suspicious emails by detecting impersonation scams and emails from outside the organization.
  4. Adhere to clear financial controls: If you handle finance or procurement, follow the strict policies for all transactions and comply with dual-approval for any wire transfer or payment above a certain threshold. This ensures that you alone cannot be pressured into sending funds without a secondary check.

Phishing simulations as training

Phishing simulations are a powerful, proactive tool for turning your employees into a robust security asset. These exercises involve sending safe, simulated phishing emails—including mock CEO fraud email messages—to your staff in a controlled environment.

The goal isn’t to trick or punish employees, but to provide practical, hands-on training. By tracking who clicks, you can measure the effectiveness of your security awareness programs and identify areas needing improvement.

Most importantly, simulations create valuable “teachable moments,” providing immediate feedback to employees who fall for a test, reinforcing how to spot red flags in a real-world context. This process strengthens your human firewall, making your entire organization more resilient against actual CEO impersonation scam attempts.

Steps to take if you fall victim to CEO fraud

Becoming the victim of CEO fraud can be a distressing and high-stakes situation, but a swift, organized response can significantly limit the damage and improve your chances of recovery. If you believe you have just become a victim, here’s what you should do immediately and in the days that follow:

  1. Act immediately to stop the funds: The moment you suspect a fraudulent transfer has occurred, contact your financial institution to request a recall of the funds. Then, have your bank contact the receiving bank to freeze the account. Time is critical, so this must be your first step.
  2. Notify internal leadership: Alert your company’s leadership, security/IT department, and legal team about the breach. They need to be aware of the situation to enact the company’s incident response plan and assess the scope of the damage.
  3. Preserve all evidence: Do not delete anything. Keep the original fraudulent emails, any communication records, and relevant transaction logs. This evidence is crucial for both law enforcement investigation and your internal review.
  4. Report to law enforcement: File a detailed report with the appropriate law enforcement agencies. For businesses in the United States, this means filing a complaint with the FBI’s Internet Crime Complaint Center as soon as possible. Their Recovery Asset Team can sometimes assist in recovering stolen funds.
  5. Conduct a post-incident review: Once the immediate crisis is managed, perform a thorough internal audit. Analyze how the CEO fraud incident occurred, identify vulnerabilities in your processes or systems, and implement corrective actions and additional training to prevent future attacks.

FAQs about CEO fraud

What’s the difference between CEO fraud and regular phishing?

Regular phishing casts a wide net to catch any fish, with scammers sending generic emails to thousands of people, hoping a few will bite. Meanwhile, CEO fraud is a form of spear phishing, which is like using a specific lure to catch a specific fish. It’s a highly targeted attack where scammers impersonate a specific executive to trick a specific employee, using information they’ve gathered about your company to make the request seem legitimate.

Is our spam filter enough to stop these scams?

While a good spam filter is an important layer of defense, it is often not enough to stop a sophisticated CEO impersonation scam. These fraudulent emails are carefully crafted to avoid common spam triggers. They typically don’t contain malicious links or attachments and are sent in low volumes, allowing them to slip past filters that are looking for mass-mailing campaigns.

Why do scammers ask for gift cards?

Scammers love gift cards because they are a form of untraceable currency. Once you share the card number and PIN, the scammer can instantly redeem the funds or sell the card on the dark web. Unlike a wire transfer, which leaves a digital trail and can sometimes be recalled, gift card transactions are fast, anonymous, and irreversible, making them a low-risk, high-reward target for criminals running these types of CEO fraud scams.

Can I get in trouble for falling for a CEO fraud scam?

It’s natural to worry, but it’s important to remember that these attacks are designed by professional criminals to exploit human psychology and bypass technical defenses. A supportive company culture recognizes this. The priority should always be on reporting a suspected incident immediately without fear of blame. Quick reporting is the best chance to recover funds and is a sign of a responsible employee. After the incident, the focus should be on learning lessons to strengthen defenses for everyone.

Final thoughts

While cybercriminals continuously refine their tactics, your strongest defense is a proactive and unified security posture. By fostering a culture where every employee feels empowered to question and verify requests, you build a powerful human firewall. Remember that strong processes, ongoing awareness, and a commitment to verification are the keys to protecting your organization from the threat of CEO fraud.