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City supe slaps bank for account compromise

$378,000 Ukraine transfer

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A supervisor for the town of Poughkeepsie, New York lashed out at a local bank after someone siphoned $378,000 out of municipal coffers and transferred it to Ukraine.

Supervisor Patricia Myers, who waited more than three weeks to disclose details of the heist, didn't question whether any of the responsibility rested with officials who administered the town's banking account. Instead, she blamed TD Bank officials for not immediately reporting the transfers, according to reports here and here in The Poughkeepsie Journal.

"We find it unacceptable that movement, or attempted movement, of money from a town account to an account in Eastern Europe did not immediately raise a red flag with a bank, was not questioned by anyone at the bank, but was simply processed," Myers said in a statement read before the Town Board of Supervisors meeting Wednesday.

The $378,000 was withdrawn in four transfers on January 11 and 12 that wiped out the account, which the town used to pay bills. The theft was discovered on January 13 by the town's comptroller. Of the stolen loot, $95,000 has since been recovered. The town is working to recover the remainder.

Over the past few years, attacks on the online bank accounts of municipalities and small businesses have reached epidemic proportions. The FBI said recently it has investigated more than 200 cases of online bank theft, mostly in 2008 and 2009, in which cybercooks successfully made off with $40m, the paper reported. In all, more than $100m was targeted.

Last month, a small school district in the western part of New York state reported having more than $3m stolen from its online account before recovering all but $497,200 of that amount.

The crimes are generally carried out by organized criminal gangs, mostly located in Eastern Europe and usually succeed by tricking people with access to the account into installing password sniffers and other malware on their machines.

Myers said town officials have changed all account numbers and removed computers that had access to the accounts. She didn't say whether malware was found on them. ®

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