[balls187]

With access to thousands of bank accounts, you can issue small transfers to and from those accounts, over and over and over again, to the point that the transfers are so many, that tracing them becomes significantly difficult.

It's not untraceable, but the cost associated with unraveling a single theft becomes prohibitively expensive.

[usefulcat]

Are the banks liable for these kinds of losses? I'm guessing no; if they were, I doubt they'd consider it "prohibitively expensive" to track down losses of hundreds of thousands to millions of dollars.

[balls187]

"hundreds of thousands to millions of dollars." is quite a large range when talking about money.

My comment was specific to the example given in the article, where to amount was about $195,000. While not a tiny sum of money, the amount of man hours spent to unravel those transactions, to ultimately get to recoverable sum, would be close to if not more than the original amount. And getting to the amount, may not guarantee that you can recover the funds anyway.

[AlexDanger]

Putting aside the cost/hours of recovering the money, is this the only reason its 'untraceable'?

I understand it becomes tedious to unravel the transactions, but is it still a tractable problem? Or do these people eventually shift the money into offshore banks that refuse to co-operate with authorities? It seems such a bank would be quickly cut off from the rest of the world if it existed.

[kordless]

Hacking the trust network of the world's banking system. The network is only as secure as what is connected to it.

[hga]

Based on some events of this sort in my area, as I understand it organizations that get that sort of direct access and control over their bank accounts do so under a strict set of conditions the bank lays down. I.e. an isolated computer that no one's reading email on, which prevents the sort of spear plishing detailed in Haysite Reinforced Plastics experience with PNC Bank.

After such an event the bank will investigate, and if the org violated their conditions and that led to the loss, it's on the org. And I suspect org insurance policies have "we don't make you whole if you're an idiot" provisions.

Or at least that's how it went down here when e.g. a school district was sloppy and lost 6 figures of their bank balance.

[shadowfox]

It may be insured to a large extent.

[astrodust]

Consider the old casino trick: One person takes out a lot of money, "loses" it at poker to someone else, that person cashes out.

How can you possibly trace that? Sift through the casino's financials for deposits and withdrawals of a similar size?

Sometimes the trail goes completely cold.