Feeds

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

Unlimited e-transfers made simple

Next gen security for virtualised datacentres

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. ®

The essential guide to IT transformation

More from The Register

next story
Goog says patch⁵⁰ your Chrome
64-bit browser loads cat vids FIFTEEN PERCENT faster!
Chinese hackers spied on investigators of Flight MH370 - report
Classified data on flight's disappearance pinched
NIST to sysadmins: clean up your SSH mess
Too many keys, too badly managed
Scratched PC-dispatch patch patched, hatched in batch rematch
Windows security update fixed after triggering blue screens (and screams) of death
Researchers camouflage haxxor traps with fake application traffic
Honeypots sweetened to resemble actual workloads, complete with 'secure' logins
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.