Feds investigate theft of $3m from NY school
An epidemic continues
The FBI and New York state police are investigating the online theft of more than $3m from a small school district in the western part of the state.
All but $497,200 was eventually recovered after an employee at Norwich, New York-based NBT Bank alerted officials at Duanesburg Central School District to the unusually large overseas transfers and managed to get them reversed. The pilfering happened over a four-day period starting on December 18.
"At this point, they haven't uncovered exactly how the funds were accessed, so that's what they're working on now," said Audrey Hendricks, a spokeswoman for the district.
Tales of multi-million dollar thefts from online bank accounts have become common by now. In November, the FBI estimated that losses to small businesses alone reached $100m as of the end of October. The American Bankers Association and the FBI recently warned small and midsized businesses to limit their online transactions to a single computer that's not used for other activities such as reading email or general web surfing, according to USA Today.
The FBI has investigated more than 200 cases on online bank theft, mostly in 2008 and 2009, in which cybercooks successfully made off with $40 million, the paper reported.
In October, El Reg seconded advice first provided by security reporter Brian Krebs that online banking transactions no longer be carried out using Windows-based PCs.
Hendricks, the school district spokeswoman, said three employees were authorized to conduct online transactions, each on a different computer. None of them is considered a suspect in the theft. The district has about 1,000 students and an annual budget of $14.9m. ®
it was a phish email...
they got an email from a rich foreign investor who wanted to give some funds to the kids but needed the collateral to make the transfer
shouldn't the banks pay back the money stolen
if it was in the banks care when it was stolen, then the bank should suffer the loss and not the small business's, schools, etc. i mean whats the point of using a bank then?? cash would be safer.
I think recommending against windows for online banking goes a little far.
Two-factor authentication should be mandatory for online banking, a practice I believe US banks still don't all follow.
Granted, this leaves the door open for man-in-the-middle attacks, but I suspect these are much, much harder to perpetrate.