The Town of Tisbury was hit with a wire fraud scam this month, ultimately losing taxpayers a small sum of money.
Just over $16,000, originally intended to pay for a dredge survey completed by CR Environmental, was wired to a fraudulent account on May 5 by town employees after a hacker compromised the email of a former employee, according to town officials.
It is the second time over the last year that a town on the Island was hit by a cyber scam. Oak Bluffs in August was scammed out of $332,000, also in a wide-fraud scheme.
In Tisbury following the incident, town officials are creating a new policy they believe will help prevent further cyber fishing attempts in the future.
As to the details of the scam, Tisbury finance director Jonathan Snyder explained to the town’s select board on Tuesday that through the former employee’s account, the imposter intercepted an email containing two invoices from CR Environmental and altered the invoices to include instructions for payment via an electronic bank-to-bank payment. The scammers cited the bill’s overdue status. Snyder said that because the email came from an internal email, they were not suspicious.
Days later, CR Environmental contacted the town seeking payment, revealing that no money was sent to them.
Snyder said that this was not the fault of the town employee whose email was hacked, and that they had no reason to suspect their email was compromised.
“As the person who sent the funds, I am responsible, and I regret that I was not more suspicious,” said Snyder.
On Tuesday, the select board unanimously approved the replenishment of $16,860 lost in the scam.
Snyder is also implementing a new policy that requires verification over the phone to a department head whenever dealing with similar payments.
“The new policy should prevent future fraudulent wires,” Snyder said.
$16K is not a “small sum of money”, Nicholas, unless you have it as pocket change to give to the Town? Didn’t think so.
Relative to the annual budget it is a rounding error.
“ requires verification over the phone to a department head whenever dealing with similar payments. ”
Long known to be “best practice“ for electronic funds transfers. Government workers are often behind on technological best practices. This seems true from the smallest town all the way up to the federal government. The answer is a general unwillingness to invest. No one wants to spend the money upfront, but we’re often forced to spend more money in the long run. (The high school replacement cost is a similar issue- it’s an enormous amount of money, true, but it’s also a 50 to 75 year investment in our future. And long overdue. )
A.I. technology has created a situation where a person’s actual voice can be imitated, and even phone conversations can be faked. It’s a brave new world.
Yes, but not likely to be an issue if the sender initiates a call to the recipient to confirm the transaction details, including the correct bank account before sending.
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