The Ketchikan Gateway Borough has recently made a significant recovery after falling victim to a scam that resulted in the loss of over $625,000 two months ago. On Thursday, the local government announced that they were able to retrieve almost the entire amount that was stolen.
The incident occurred back in May when Borough Manager Ruben Duran informed the assembly that a cybercriminal had gained unauthorized access to a vendor’s email account. The scammer then proceeded to send fraudulent payment instructions to the borough, resulting in a payment of $625,155.84 for work at the Dudley baseball field, as reported by Finance Director Charlanne Thomas.
Fortunately, the receiving bank identified multiple suspicious transactions and froze the hacker’s account. However, in the aftermath of the incident, there was uncertainty regarding the possibility of recovering the funds and the extent of coverage provided by the fraud insurance held by the borough.
The situation took a positive turn on Thursday morning when Thomas received the news that almost all of the stolen funds, except for $23, had been returned to the borough’s account. Despite the minor discrepancy of $23.84, Thomas expressed her gratitude for the recovery of the majority of the stolen funds. The borough promptly reimbursed the original vendor for their services at the baseball field, and no financial transactions were delayed thanks to the sufficient balance in the general fund.
Following the scam in May, the borough has remained vigilant as they experienced another attempted fraud within the last two weeks. This time, the scam involved infiltrating an email thread with a known vendor and requesting changes to banking information. Thomas highlighted the sophisticated nature of the recent fraud attempt, which served as a reminder of the continuous threat posed by cybercriminals.
In response to these incidents, the finance department has implemented several security enhancements, including a review process for all banking information changes. Thomas emphasized the importance of thorough supervision and discussion among supervisors to mitigate the risk of future fraud attacks. Moving forward, the borough is committed to safeguarding its financial operations “to the best of our ability” against potential cyber threats.
The successful recovery of the stolen funds serves as a testament to the proactive measures taken by the Ketchikan Gateway Borough in addressing cybersecurity challenges and protecting public funds. As cyber threats continue to evolve in sophistication, it is essential for organizations to remain vigilant and implement robust security protocols to prevent financial fraud and data breaches.