It started like any other order.

A feed supplier received a request from what appeared to be a legitimate customer. The email address matched the company’s name. The website checked out. The communication was consistent and professional. There were no obvious red flags.

The order was filled and shipped.

Payment never came.

In the end, the supplier lost $250,000 worth of product to a fraudster who had carefully replicated a real company’s identity. The business name was legitimate. The employees were real. Even the branding matched. The only difference was a slightly altered domain and a criminal on the other end of the transaction.

This type of fraud is no longer rare. It is becoming a growing concern across the grain, feed and broader agriculture supply chain.

A Shift in How Fraud Happens

Historically, fraud in agriculture often involved counterfeit inputs, false billing, or contract manipulation. Today, it is increasingly digital, fast-moving and difficult to detect. Federal agencies have been tracking the trend, noting a clear shift in both tactics and targets.

In a joint advisory titled Criminal Actors Use Business Email Compromise to Steal Large Shipments of Food Products and Ingredients, the FBI, U.S. Department of Agriculture and Food and Drug Administration Office of Criminal Investigations outlined how criminals are moving beyond traditional financial fraud. Rather than attempting to steal money directly, many are now targeting physical goods.

Through business email compromise, or BEC, fraudsters impersonate legitimate companies and place large orders for commodities or ingredients. The supplier fulfills the order, often extending credit based on what appears to be a verified business relationship. The shipment is delivered, but payment never arrives. According to the FBI’s Internet Crime Complaint Center, BEC scams resulted in nearly $2.4 billion in reported losses in 2021, making it one of the most financially damaging cybercrimes affecting businesses. In agriculture, those losses are often tied to tangible products leaving the facility.

How the Scam Works

The mechanics are straightforward, but execution has become increasingly sophisticated. Fraudsters create email addresses and websites that closely resemble those of legitimate companies, often changing just a single character or using a different domain extension. In some cases, criminals gain access to actual company email systems, allowing them to communicate from legitimate accounts.

They pose as buyers and frequently use the names of real executives or employees to build credibility. Orders are typically large and time-sensitive, aligning with normal industry activity. Credit applications may be submitted using accurate business information pulled from public records, and in many cases those applications pass standard checks without raising concern.

Once the supplier approves the order, the product is shipped. Fraudsters may redirect delivery to a third-party location or introduce last-minute changes to shipping details. By the time payment is due, the product is gone. Federal investigators have documented multiple cases involving shipments of powdered milk, sugar and other high-value ingredients ranging from $100,000 to more than $600,000. In several instances, suppliers only discovered the fraud after attempting to collect payment weeks later.

What to Watch For

  • Email addresses that differ by a single character or use an unusual domain
  • Large orders from new customers with no established relationship
  • Requests conducted only through email with no phone verification
  • Last-minute changes to shipping locations or payment instructions
  • Urgent timelines that pressure immediate fulfillment
  • Credit applications that rely entirely on publicly available company information
  • Logos or branding that appear slightly off or inconsistent

AI Is Raising the Stakes

What is changing now is not just the volume of fraud, but the quality. Artificial intelligence tools are making it easier for criminals to build convincing websites, generate professional communication and replicate legitimate business interactions at scale.

Traditional warning signs are becoming less reliable. Grammar errors, once a common indicator of fraud, are no longer a dependable signal. Logos, formatting and documentation can be recreated with precision, and even tone and writing style can be matched to real companies. In some cases, fraudsters are combining AI-generated content with publicly available business data to create highly credible identities that pass initial scrutiny.

The result is a level of sophistication that challenges even experienced operators and established verification processes.

The Human Factor

Despite the technology involved, these scams often succeed because they look routine. Agriculture is built on relationships, but it is also built on speed. Orders move quickly, especially during peak seasons, and decisions are often made under time pressure. When a request appears legitimate and aligns with standard business practices, it is easy to move forward without additional verification.

There is also a natural reluctance to question what appears to be a credible customer. That hesitation can create an opening for fraud.

Another factor that keeps these incidents underreported is embarrassment. Operators who fall victim may be hesitant to speak up due to concerns about reputational impact or internal accountability. However, silence allows these schemes to continue. As highlighted in the Federal Trade Commission’s Riding Herd on Cattle Feed Scammers alert, fraud schemes often rely on repeated success across multiple victims, making information sharing a critical part of prevention.

Beyond Financial Loss

The impact of agricultural fraud extends beyond financial loss. When stolen products are resold, they are often repackaged without regard to safety or regulatory standards. Labeling may be inaccurate; allergen information may be missing, and storage conditions are unknown. Federal agencies have warned that this creates potential public health risks, particularly when ingredients enter the food supply chain without proper control.

There is also reputational damage for legitimate companies whose identities are used in these schemes. A case reported by Greenwich Free Press described a Connecticut equipment dealer whose name and address were used in fraudulent online listings. Victims across multiple states sent payments for equipment that was never delivered, believing they were dealing with a legitimate business. The dealer was left responding to calls from customers who had lost thousands of dollars, highlighting the broader industry impact of these scams.

Common Red Flags

While fraud tactics are evolving, certain patterns remain consistent. Requests often involve large initial orders from new customers with no established relationships. Communication may be limited to email, with little or no direct contact. Urgency is frequently introduced, creating pressure to fulfill orders quickly. Fraudsters may also request last-minute changes to shipping destinations or payment details. In many documented cases, these warning signs were present but easy to overlook in the context of routine business operations.

What to Do If You Suspect Fraud

  • Stop communication with the suspected party immediately
  • Contact your shipping provider to halt or redirect deliveries if possible
  • Notify your bank or financial institution without delay
  • Document all communications, invoices and transaction records
  • Report the incident to the FBI’s Internet Crime Complaint Center at IC3.gov
  • Contact local law enforcement and relevant regulatory agencies
  • Alert internal teams and industry partners to prevent additional losses

Strengthening Internal Controls

Preventing fraud requires a combination of awareness, training and clearly defined processes. While verification remains an important step, many companies are finding that consistent internal policies provide a stronger and more reliable line of defense against increasingly sophisticated schemes.

Employee training plays a central role. Staff should be equipped to recognize suspicious requests, question inconsistencies and escalate concerns before orders are approved or fulfilled. Creating a culture where employees feel comfortable slowing down and verifying details can prevent costly mistakes. On the technology side, tools such as multi-factor authentication, email filtering and account monitoring add another layer of protection by reducing the likelihood of compromised systems being used to facilitate fraud.

Establishing clear customer and payment policies is equally critical. The FBI, USDA, and FDA recommend independently verifying all new customer information through trusted sources such as industry directories, association listings, or known contact points. Many businesses are also moving toward requiring full payment from first-time customers before releasing product. Extending credit without an established relationship introduces significant risk, particularly when large orders are involved.

In addition, any changes to payment details, shipping destinations, or account information should be confirmed using a known, verified phone number rather than contact information provided in an email or new correspondence. These checkpoints create intentional pauses in the process, giving teams the opportunity to validate transactions before product leaves the facility.

When policies are clearly defined and consistently applied across the organization, they not only reduce exposure but also create a more disciplined approach to managing risk in day-to-day operations.

If Something Feels Off

One of the most consistent recommendations from investigators is to pause and verify. Fraud schemes often rely on urgency, and taking time to confirm details can prevent substantial losses. A direct phone call to a known contact within the company can quickly determine whether an order is legitimate, and cross-checking information across multiple sources adds another layer of protection.

If something does not align, it is worth investigating before moving forward.