High-performance networking gear manufacturer Ubiquiti Networks Inc. has fallen victim to email fraudsters, who made off with an astonishing $46.7 million of the company’s cash.

Ubiquiti admitted being scammed in an SEC filing made on August 4, but the incident has only just come to the attention of the press. According to that filing, the company only became aware of the fraud on June 5, saying it was a victim of “criminal fraud” that involved “employee impersonation and fraudulent requests from an outside entity targeting the Company’s finance department.” Somehow, the fraudsters tricked employees into transferring $46.7 million held by one of its Hong Kong subsidiaries to overseas bank accounts belonging to the criminals.

Ubiquiti, who’s CEO is Memphis Grizzlies owner Robert Pera, hasn’t revealed the details of the scam, but renowned cybersecurity blogger Brian Krebs said the fraudsters used a common trick known as “the CEO scam” or “Business Email Compromise”.

To carry out the scam, criminals either hijack or impersonate the email of a senior member of staff within an organization. They use that email to target employees in the company’s finance department, or someone else who has the authority to transfer large amounts of the company’s money. The fraudsters standard trick is to inform the person that one of the firm’s regular clients has changed its banking details, and that future payments should be made to the new account number they provide.

Ubiquiti Networks says it immediately contacted law enforcement officials and the concerned financial institutions when it become aware of the fraud, and has managed to recover $8.1 million of its cash. The company also says it hopes to recover an additional $6.8 million in due course. However, that still leaves a whopping $32.3 million unaccounted for.

Not surprisingly, an internal audit carried out by Ubiquiti concluded there are “material weaknesses” in the company’s “internal control over financial reporting”.

It isn’t immediatley clear if the amount stolen is covered by insurance, but Ubiquiti did say the incident will result in some “near-term expenses”. However, the firm reassured shareholders that it doesn’t expect the fraud to have a material impact on its business in the long run.

According to the SEC filing, the firm’s Chief Accounting Officer Rohit Chakravarthy has already resigned over the incident. There’s currently no indication of who the fraudsters might be.

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