Scammers lured Cabarrus County government into transferring $2.5 Million to fake account: $1.7 Million remains lost
$2.5 Million that intended to be used for building the new high school got placed in a bank account belonging to cybercriminals. The Cabarrus County government staff got tricked into thinking that they are paying the real contractor from Branch and Associates, that were working on the West Cabarrus High School building, and sent the money to scammers' account without knowing.
The officials of North Carolina, Cabarrus County, received an email on November 2018 with the updated bank account information and followed the needed protocol to get forms and documentation about the electronic funds and transfers. Unfortunately, the statement issued by the Cabarrus County government at the end of July 2019, claims that scammers were prepared and followed all the requested submissions, so there were no concerns regarding the payment.
Since all the documents got submitted and signed by the bank, on December 21st, Cabarrus County officials transferred $2 504 601 to the new Branch and Associated bank account, or as they believed. However, all the questions got raised when the genuine Branch and Associates' representatives requested the payment.
The false transfer unnoticed until January 8, 2019
When the request for documents got placed, criminals sent all the needed documentation within the week, and the funds got transferred just before Christmas. No one thought about something wrong until the January 8th of the new year came about, and the real contractor asked the county officials about this missing payment. Then the investigation started, and more details came to light:
The investigation revealed that conspirators posed as representatives of Branch and Associates and targeted employees of Cabarrus County Schools and Cabarrus County Government in a series of emails that began on November 27, 2018.
Soon after this, the bank and law enforcement got informed about the incident. According to the investigators, there is no information that the system of Cabarrus County computer got hacked or compromised in any other way as it is common. This is a one-time social engineering attack that compromised business emails and pulled the scam with a bogus email address and sophisticated tactics.
The bank of America froze $80 000 of the transferred $2.5, $1.7 remains missing
The further investigation revealed that after the payment, scammers obtained the funds transferred by the Cabarrus County via multiple other accounts. When the conspiracy got revealed the bank recommended procedures to follow that included contacting the bank and freeze as much of the transfer as possible:
Branch and Associates notified Bank of America, the bank to which funds were transferred, which froze $776,518.40 of the $2,504,601 that remained in traceable accounts.
Cabarrus County consulted with insurance representatives, and they got an additional $75 00 insurance payment. Branch and Associates received all the money from the required $2 504 601. However, the last transaction of $1,653,082.60 got sent from a portion of the Assigned Fund Balance set aside for extraordinary circumstances to the Capital Projects Fund, not recovered from the initial transfer.