Feeds

Crooks siphon $644,000 from school district's bank account

Unlimited e-transfers made simple

Choosing a cloud hosting partner with confidence

New York City's Department of Education was defrauded out of more than $644,000 by hackers who targeted an electronic bank account used to manage petty cash expenditures, investigators said.

The DOE's small item payment process account at JPMorgan Chase was supposed to be limited to purchases of less than $500, but an oversight by officials allowed electronic transfers of any amount, according to investigators who probed the theft. The crooks were able to perpetrate the scam for more than three years because education officials didn't bother to reconcile account statements on a regular basis.

“It is difficult to understand how the DOE accumulated years of account statements, reflecting hundreds of thousands of public dollars spent to pay bills, but did not review them,” the report, which was written by Special Commissioner of Investigation for the New York City School District, stated. “A cursory examination would have shown that the charges were not normal school expenses.”

The individual who headed the theft was Albert Attoh, who in April was sentenced to 364 days in federal prison after pleading guilty to Bank Larceny. He was also ordered to pay more than $275,000 in restitution and be on probation for two years following his release.

According to the report, Attoh provided the account and routing information to others so they could use it to pay student loans and invoices for purchases at Home Depot and other retail outlets. In return, Attoh demanded cash payments. Because DOE officials failed to block the use of electronic transfers, the account was wide open. All that was required what the account number and the bank routing number.

The scheme started in October 2003 and only came to the attention of officials in February 2007 when Chase received a tip that someone was trying to pay bills using the DOE account. In all, $644,313.69 was stolen, but $128,228.49 was eventually recovered. A PDF of the report is here. ®

Beginner's guide to SSL certificates

More from The Register

next story
FYI: OS X Yosemite's Spotlight tells Apple EVERYTHING you're looking for
It's on by default – didn't you read the small print?
Russian hackers exploit 'Sandworm' bug 'to spy on NATO, EU PCs'
Fix imminent from Microsoft for Vista, Server 2008, other stuff
Microsoft pulls another dodgy patch
Redmond makes a hash of hashing add-on
'LulzSec leader Aush0k' found to be naughty boy not worthy of jail
15 months home detention leaves egg on feds' faces as they grab for more power
China is ALREADY spying on Apple iCloud users, claims watchdog
Attack harvests users' info at iPhone 6 launch
Carders punch holes through Staples
Investigation launched into East Coast stores
Kill off SSL 3.0 NOW: HTTPS savaged by vicious POODLE
Pull it out ASAP, it is SWISS CHEESE
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.