Crook targets city of Oregon
As much as $393,000 is still outstanding
OREGON, Ohio (WTVG) - Scammers have hit all kinds of people and places.
Oregon is now added to that list as the city tries to recoup hundreds of thousands of dollars.
It turns out they were hit by a thief posing as a contractor. Several letters document the issues that came to light in January, as a seemingly innocent request turned out to be anything but.
Places like Oregon City Hall receives invoices all the time. They received two invoices, one late last year and one earlier this year, from a company called Midwest Contracting of Holland. There were two payments that were made electronically, one being $657,000 and the other being $307,000.
Someone from Citizens Bank in New York flagged the payments and contacted the city, at that moment Oregon learned it was scammed.
Written correspondence between the city’s finance director and its insurance company, details that the problems began in December when an email was sent to the city. The email was crafted by someone posing as a contractor with a new “request for vendor electronic funds transfer” and a voided check.
That’s when the account numbers were changed and according to that letter from the city, an employee made the change without any verification or investigation pursuant to policy and procedure.
When the fraud was detected Oregon officials called Midwest Contracting officials who immediately pointed out that the email address did not belong to them and existing accounts would remain the same, ultimately meaning the city of Oregon paid nearly $1,00,000 to a thief.
Luckily all of the money is not gone. A follow-up letter to a Cincinnati CPA documented how lots of the money was recovered but not all. The $307,000 payment was reversed, an insurance claim netted $250,000. Yet, even with those funds plus an estimated $15,000 credit, the letter documented the city’s net loss at more than $393,000 at the end of April.
A police report was made to Oregon police which indicates the FBI was notified and that an investigation would be made there as well.
When asked for an update on how much money is still outstanding, neither the mayor of Oregon nor the city administrator responded to requests for comments on Friday.
One of the city letters states the city employee who made the changes to the accounts retired back in February.
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