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Snapchat, Seagate among companies duped in tax-fraud scam

SAN FRANCISCO – Tax-filing season is turning into a nightmare for thousands of employees whose companies have been duped by email fraudsters. A major phishing scheme has tricked several major companies – among them, the messaging service Snapchat and disk-drive maker Seagate Technology – into relinquishing tax documents that exposed their workers’ incomes, addresses and Social Security numbers.

The scam, which involved fake emails purportedly sent by top company officials, convinced the companies involved to send out W-2 tax forms that are ideal for identity theft. For instance, W-2 data can easily be used to file bogus tax returns and claim fraudulent refunds.

The embarrassing breakdowns have prompted employers to apologize and offer free credit monitoring to employees. Such measures, however, won’t necessarily shield unwitting victims from the headaches that typically follow identity theft.

“This mistake was caused by human error and lack of vigilance, and could have been prevented,” Seagate’s chief financial officer, Dave Morton, wrote in a March 4 email to the company’s employees about the breach.

The swindlers behind the tax scam are exploiting human gullibility rather than weaknesses in computer or Internet security. They have targeted company payroll and personnel departments, in many instances with emails claiming to be requests from the company CEO asking for copies of worker W-2s.

The schemes are so widespread that the IRS sent a March 1 notice alerting employers’ payroll departments of the spoofing emails. The IRS said it’s seen a 400 percent increase in phishing and computer malware incidents this tax-filing season.

The agency said the scheme has so far claimed “several victims,” but declined to disclose how many other employers had reported releasing W-2s to unauthorized parties.

“It’s premature to provide numbers at this point, but even one company being fooled by these criminals is too many,” the IRS said in a statement.

The federal alert didn’t come soon enough for Snapchat, which on Feb. 28 revealed that its payroll department had been duped by an email impersonating its CEO, Evan Spiegel. The Los Angeles company didn’t specify how many employee W-2s it released. Snapchat didn’t respond to requests for comment Tuesday.

“When something like this happens, all you can do is own up to your mistake, take care of the people affected, and learn from what went wrong,” Snapchat wrote in a post on its corporate blog .

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