The Ketchikan Gateway Borough announced Thursday that it was able to recover virtually all of the more than $625,000 that it was scammed out of two months ago.
Back in May, Borough Manager Ruben Duran informed the assembly that a “bad actor” had hacked a vendor’s email account and sent new payment instructions to the borough. The $625,155.84 payment was for work at the Dudley baseball field, according to Finance Director Charlanne Thomas.
The hacker’s account was soon frozen, after the receiving bank noticed multiple similar suspicious payments. Since then, the local government hasn’t been sure whether they could recoup any of the funds, or how much their fraud insurance would cover.
That was until Thursday morning, when Thomas said she got the good news.
“When we came in, we were notified that we received — all but $23 of the fraud was redeposited back into our account,” Thomas said.
She wasn’t sure what the $23.84 discrepancy was about, but was very thankful they were able to get the rest back. Thomas said the borough had promptly paid the original vendor for their work at the baseball field, and that luckily no finance transactions were held up due to the healthy balance in the borough’s general fund.
Thomas said they’re on especially high alert now because, within the last two weeks, they had another fraud attempt that again infiltrated an email thread with a known vendor.
“And they piggybacked on that email, and they forwarded this new banking information and requested that it be changed,” Thomas said. “I’m pretty paranoid at this point.”
She said before the scam in May, the finance department already had a policy of requiring banking information changes to be made over the phone, but this was a new vendor who followed up just hours after they set up the account.
“So many large businesses have multiple accounts for different things. I mean, I know that the borough does,” Thomas said. “So it wasn’t an unreasonable, out of the ordinary thing that we deal with. It was very sophisticated.”
Thomas said the department has made a number of security updates since May, some of which she didn’t want to share publicly, but all banking changes are now reviewed and discussed among supervisors. Going forward, she said the borough is protected from fraud attacks “to the best of our ability.”
