Cyber Fraud: Fraudulent Financial Transactions
May 10, 2023
Contact Information:
Michele Parry
Town Manager
(541) 947-2020
FOR IMMEDIATE RELEASE
Lakeview, Oregon, May 10, 2023: On December 1, 2022, Town of Lakeview (“Town”) notified the public that it was the victim of two fraudulent financial transactions. Upon learning of the fraudulent transactions, Town immediately activated an incident response team to (1) investigate the fraudulent transactions, (2) evaluate the extent of the transactions, and (3) ensure that technology and policies are implemented to prevent future fraudulent transactions. Town also notified the Federal Bureau of Investigation, Lake County Sheriff’s Office, and other appropriate authorities.
Town’s investigation is now complete. Town’s investigation determined that Town was the victim of two targeted email phishing attacks. The phishing attacks were designed to fool individuals into clicking on links which install malware and expose sensitive data. Town’s internal networks and systems were compromised when one or more Town employees clicked on the perpetrator’s emails. With insider information, the attacker was able to successfully pose as two separate vendors, funneling payment for two legitimate invoices totaling just over 200K to their bank accounts.
Town Response
Town has installed anti-phishing software to protect Town and mitigate potential risk indicators. In addition, Town has implemented multi-factor authentication to provide a layer of defense should a threat successfully compromise Town’s system and/or credentials. Town has also established a more secure financial transaction authentication process. Moving forward, Town will utilize a comprehensive security IT infrastructure to ensure the security of Town’s networks and systems.
Town pursued all available avenues to recoup the funds. At this time, Town understands that it will recover $50,000.00 from Town’s insurance provider. Because the fraudulent transactions were associated with fire and 911 funds (which were already depleted), the remaining funds will be absorbed by Town’s general fund.
The economic loss will impact Town’s budget for this fiscal year (FY2022-2023) and the next fiscal year (FY2023-2024). Notwithstanding the economic loss, Town will continue to endure the negative implications this fraud has caused our community. Fraud is a personal violation that erodes trust and shatters confidence. Town understands the frustration and vulnerability that Town’s community may feel due to the fraudulent transactions. Town must and will learn from this situation and do better in the future.
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