Peterborough, N.H., confirmed that it has lost $2.3 million in taxpayer money due to two instances of email-based scams.
In a press release posted on Facebook, Peterborough Town Administrator Nicole MacStay and Select Board Chair Tyler Ward said that last month town officials learned the ConVal School District had not received a $1.2 million monthly transfer from the town. Through an investigation, town officials learned the money was lost as part of email-based fraud.
After the discovery, the town’s Finance Department staff immediately put a stop payment order on the transfer, however, the funds had already left the town’s bank account. The town said it does not believe that the funds can be recovered by reversing the transactions. Additionally, town officials don’t yet know if these losses will be covered by insurance.
Alongside the Finance Department’s efforts, the town’s IT department contacted the U.S. Secret Service and the cybersecurity consulting firm ATOM Group through NH Primex, the town’s property and liability insurance coverage provider.
The Secret Service Cyber Fraud Task Force traced the funds and discovered that they were ultimately converted to cryptocurrency. Working with the cybersecurity firm, Peterborough IT staff was able to identify email exchanges between Finance Department staff and cybercriminals posing as ConVal School District staff using forged documents and email accounts, but were not immediately able to identify who had perpetrated the fraud.
Earlier this month the Finance Department also discovered that two bank transfers meant to go to general contractors working on construction projects for the town also had been fraudulently diverted to cybercriminals through similar means. Once again, the town said it notified the U.S. Secret Service Cyber Security Fraud Task Force, ATOM Group, and its insurance providers. An investigation into the forged email exchanges showed that they originated overseas.
In the press release, the town said the investigation currently shows that no town staff was criminally involved in the transfers. However, town officials did confirm that the Finance Department staff who were directly targeted in this fraud are on leave until the U.S. Secret Service’s ongoing investigation has been concluded.