Dennis Vacco didn’t need any more food for thought.
As he sat down for dinner with CrediVault CEO John Gavigan to discuss ways to use the blockchain technology they’d been developing together to prevent financial fraud, Dennis — partner at law firm Lippes Mathias — had recently found himself in the middle of trying to solve two cases involving missing wire transfers.
Just last year, one of his clients had wired money from Israel to a bank in New Jersey to complete a real estate transaction. But when the seller’s lawyer never received the funds, an investigation found that $4.25 million had been rerouted to a bank in Delaware instead of to the originally intended account in Florida.
During the pandemic, another client was fulfilling $300,000 to $400,000 worth of Covid-related supplies per month to the State of Texas until, one day, they stopped receiving the funds. Instead, the payments were diverted to an unknown bank in Utah, where it was dispersed.
“It just dawned on me at this brainstorming session that why can’t we use this technology to better protect these wire transfers?” Dennis says. “The users are typically law firms and businesspeople on both ends — two groups that should be concerned about the security of financial transactions via wire.”
So WireVault was formed to safeguard transactions using best-in-class security that mitigates risk, catches mistakes and reduces liability.
Lippes Mathias was among the first law firms to implement WireVault into its current workflows throughout all 14 of its offices located across six states, plus Washington, D.C., and Ontario.
“The learning curve isn’t difficult, and the steps that are employed are not excessive or time-consuming, ” Dennis says. “But they are important steps to help ensure that these financial transactions are better protected. Once the protective nature of WireVault is explained, then most clients want that level of protection.”
If WireVault had been employed last year when the Israeli firm had authorized its U.S. bank to send the money, then the Florida recipient would have recognized an issue right away. That’s because WireVault initiates an automatic inquiry to users when a request is made.
“Instead of waiting two weeks for the money to have gone to a third unknown bank and then eventually overseas, ” Dennis says, “WireVault would have provided alarms at both ends of the transaction contemporaneously and at a time that perhaps the theft of the money could have been prevented.”
Vacco adds that there is an unrealistic or undeserved sense of security to the traditional wire-transfer methods of using email and phone calls to verify sensitive information.
WireVault replaces those vulnerabilities by collecting, storing and sharing data using a private blockchain that only permissioned participants can access using two-factor authentication.
“I think that the more prevalent the concern about security of these transactions becomes, the more we’re going to see an uptick in the application and usage of more secure procedures such as WireVault, ” Vacco says. “I think it’s going to be driven by the business community because they understand risk, they understand the value of protection.”
