Sorry, That’s Not Your CEO — It’s Just His Evil AI Twin

What Is Synthetic Fraud?

Synthetic fraud is the use of artificial intelligence to create convincing but false digital identities—through deepfake video, AI voice cloning, and machine-generated text—to deceive employees and commit cybercrime. Unlike traditional phishing or spoofed emails, synthetic fraud exploits our senses directly: the sound of a trusted voice, the sight of a familiar face, or a message written in a leader’s exact style.

For small and medium-sized businesses (SMBs), where trust is vital and defenses are limited, this threat is especially dangerous.

A New Era of Deception

The boundary between reality and illusion has all but vanished. Generative AI has made impersonation disturbingly easy. Executives can be “synthesized” with startling accuracy—complete with a cloned voice, realistic video presence, and perfectly crafted written communication.

What once required nation-state resources is now available to cybercriminals with low-cost tools, raising the stakes for every organization.

Real-World Case Studies

• Arup: £20m Deepfake Video Heist

  In 2024, UK engineering firm Arup was tricked by a deepfake video call impersonating a senior executive, leading to HK$200 million (~£20 million) in fraudulent transfers (The Guardian).

  
  

• German Energy CEO: €220,000 Voice Clone Scam

  Criminals cloned the voice of a German energy CEO in 2019, convincing a UK subsidiary head to transfer €220,000 (ICAEW).

  
  

• LastPass: Vishing Blocked Just in Time

  LastPass revealed an AI voice attack that impersonated CEO Karim Toubba via WhatsApp and voicemail. A vigilant employee recognized the deception and prevented financial loss (Adaptive Security).

  
  

• U.S. Officials Targeted

  U.S. Secretary of State Marco Rubio was impersonated via AI-generated voice and text. Scammers targeted diplomats and government leaders using Signal and spoofed emails (The Week).

The Cost of Synthetic Fraud

Market	Key Data & Insights
U.S.	U.S.:   According to The Wall Street Journal, there were over 105,000 deepfake attacks reported in the U.S. in 2024, resulting in more than $200 million in financial losses in Q1 alone Business Insider+3Wall Street Journal+3World Economic Forum+3.   Deloitte’s Center for Financial Services projects that fraud losses enabled by generative AI could soar to $40 billion by 2027, up from $12.3 billion in 2023 Business Insider+6Deloitte+6ID Tech Wire+6.
Canada	Canada: In 2023, 50% of businesses impacted by cyber incidents cited scams and fraud as the method; total fraud recovery costs doubled to CAD $1.2 billion, with $300 million each spent by small and medium businesses on recovery Statistics Canada. Deepfake Fraud Surge: Deepfake-related fraud attempts increased 1,740% from 2022 to 2023 in North America, with losses exceeding $200 million in Q1 2025 alone Sumsub+6World Economic Forum+6AInvest+6.

Why This Hits SMBs Particularly Hard

• Limited Validation Layers – Trust-based workflows make SMBs more vulnerable.

• Scarce Resources – Many lack dedicated cybersecurity teams or continuous training.

• Automation at Scale – AI-powered attacks allow criminals to impersonate dozens of companies simultaneously.

  
  

Fraud Defense Made Simple — Tactics for SMBs

is a quick-reference infographic for SMB leaders and employees. It condenses best practices into actionable steps:

Legal & Insurance Considerations

Regulatory Landscape

EU AI Act: Deepfakes are classified as “high-risk,” requiring clear disclosure and compliance.

U.S.: Regulators are pushing for AI watermarking and warning that deceptive use of synthetic media may fall under unfair practices law.

Canada: While no deepfake-specific laws exist yet, regulators under PIPEDA highlight misrepresentation and privacy risks, with future rules likely to align with the EU.

Insurance Gaps

• Many cyber insurance policies exclude fraud caused by employee error, such as approving a payment after a fake CEO call.

• Even when covered, payouts may be capped at low sub-limits.

• Insurers increasingly require dual authorization, training, and escalation protocols before approving claims.

The Future: An Arms Race of AI vs. AI

Synthetic fraud is evolving at a staggering pace. What was once limited to pre-recorded audio or simple fake images is rapidly becoming real-time, interactive, and nearly undetectable. The cost of creating convincing deepfakes is dropping, while the tools are becoming more accessible to cybercriminals worldwide.

In the near future, businesses should expect:

• Real-time impersonation during live calls — fraudsters won’t just send fake videos; they will appear on video conferences or phone calls, adapting instantly to the conversation.

• Automated spear-phishing at scale — AI systems will generate tailored, convincing messages for hundreds of employees at once, bypassing the limits of traditional scams.

• AI-powered defenses — detection systems using watermarking, voice authentication, and anomaly detection will emerge, but it will be a constant cat-and-mouse battle.

For SMBs, the implications are clear: this is no longer science fiction. Synthetic fraud will only become faster, cheaper, and more convincing, and it is no longer a question of if attackers will target your business, but when.

Conclusion & Call to Action

Synthetic fraud is no longer a futuristic threat—it is here, exploiting voices, faces, and trust itself. For small and medium-sized businesses, one deceptive video call or voice-cloned request could mean the difference between survival and collapse. Criminals only need seconds of hesitation to succeed; your defense lies in preparation.

Don’t wait until your company becomes the next headline.

• Review your financial approval workflows—close gaps before attackers exploit them.

• Train your employees with real-world scenarios, so they recognize and resist deepfake manipulation.

• Rehearse your escalation and incident response plans—speed and clarity save money and reputation.

• Partner with trusted cybersecurity advisors who can help strengthen controls and monitor evolving threats.

Your vigilance today may be the only barrier standing between resilience and ruin tomorrow. The technology behind synthetic fraud is evolving rapidly—but so can your defenses. The businesses that survive will be those that act now.