(Des Moines) Iowa State Auditor Rob Sand is warning local governments to take steps to protect taxpayer dollars after an email scam targeting a city could cost taxpayers $655,000.
The city clerk reported receiving a fraudulent email requesting electronic payment for an invoice that appeared legitimate and matched the amount expected for a public works project. The scam was discovered when the authorized contractor contacted the city requesting payment.
The city’s financial institution recovered a separate $211,000 payment sent to the same fraudulent account. The city has filed an insurance claim, notified law enforcement and is implementing additional safeguards.
Sand said this is the second fake email scam targeting local governments reported to his office in less than a month.
To prevent fraud, Sand advises governmental entities to verify any electronic requests to change bank routing information by calling vendors or individuals using previously established contact information. He also recommends notifying vendors when payments are made and asking them to confirm receipt of the funds.
Under Iowa law, governmental entities must immediately report suspected embezzlement, theft or other significant financial irregularities to the Auditor of State’s Office. Officials should also notify the FBI and local law enforcement.
Additional precautions include carefully checking email addresses and website links, watching for grammatical errors, avoiding links in unsolicited messages and not downloading attachments from unknown senders.
