City of Ellensburg loses $185K to cyber-scammers disguised as vendor
Aug 21, 2019, 5:13 AM | Updated: 9:03 am
Less than a month after it was revealed that King County lost $220,000 to cyber criminals posing as vendors, the City of Ellensburg was robbed of over $185,000 in the same way.
It happened when what appeared to be a vendor requested payments in the form of electronic bank transfers instead of checks.
City of Ellensburg Finance Director Jerica Pascoe explained that just as in King County’s case, the masquerade was very convincing — the email contained the logo, email signature, and address that would be expected.
“The request had what appeared to be the proper and complete authentic documentation from this vendor,” she told KIRO Radio’s Dori Monson.
The city then made an electronic payment to a Wells Fargo bank account outside of the state. The mistake only became apparent afterwards.
Pascoe said that the challenge is, in today’s world, people and businesses want to use technology for many types of exchanges of information, including financial ones. While in-person meetings are the best way to verify authenticity, vendors are sometimes less than willing to come into City Hall in person.
“Unfortunately, [criminals] have gotten so good … they can send documentation that appears to be the same documentation that you get on a regular basis from that vendor,” she said. “Without verifying face-to-face, almost, it’s really, really hard to tell for sure that that is not who you think it is.”
In this instance, nobody at the city called the vendor to double-check that the request was real. In the future, this will be mandatory in such cases, Pascoe said.
She does not believe anyone affiliated with the vendor was behind the scam.
“It’s very easy for the cyber criminal to look at the cities and counties, who they’re paying, who their projects are with,” she said. “And they Google those contractors or companies, and it’s basically a form of identity theft for the contractor.”
That is one reason that the City of Ellensburg is getting the word out — as a warning of cyber crime to not just other local governments, but to businesses.
The city is looking into recovering the lost money with its insurance company. There may be additional safeguards put into place in the future for employees.
Listen to the Dori Monson Show weekday afternoons from 12-3 p.m. on KIRO Radio, 97.3 FM. Subscribe to the podcast here.