A New Hampshire town is reeling from the “very shocking” cybercrime that claimed more than 14% of its annual budget.
Peterborough is a 7,000-person town with a budget for the fiscal year of just over $15.8m. Cyber-thieves conned the town out of $2.3m through two business email compromise (BEC) scams.
First the criminals used forged documents and compromised email accounts to pose as staff at the local school district. This enabled them to divert a million-dollar transfer made to the district by the town into a bank account under their control.
The theft came to light on July 26 when the ConVal School District notified the town that it had missed a $1.2m monthly payment.
On August 18 it emerged that cyber-thieves had stolen more money by posing as general contractor Beck and Bellucci, hired by the town to repair Main Street Bridge.
Town administrator Nicole MacStay and select board chair Tyler Ward said it was not yet clear whether any of the town’s losses would be covered by their insurance policy.
In a phone interview on Tuesday, MacStay said: “It’s very shocking to us to be quite honest. It’s just been very difficult to work through all this, and try to do the best we can to recover these funds … to mitigate the burden on our residents and taxpayers.”
An investigation into the thefts has been launched by the United States Secret Service. While the investigation is carried out, the town’s finance department staff have been placed on leave.
A press release issued by Ward and MacStay suggests that finance department staff were unwitting pawns in the thefts, which have been attributed to threat actors that appear to be based outside of the United States.
“Investigations into these forged email exchanges show that they originated overseas,” stated the release.
“These criminals were very sophisticated and took advantage of the transparent nature of public sector work to identify the most valuable transactions and focus their actions on diverting those transfers.”
The town is reviewing its procedures regarding electronic financial transfers and has canceled all automated clearing house transfers.