The city of Pittsburg was the victim of a phishing scam that resulted in a loss of nearly $1 million, the city said Wednesday.
In February, a single unauthorized payment of $913,839.81 was sent to a fraudulent account pretending to be a known city vendor, the city said.
Staff noticed the issue on Feb. 12 and informed the Pittsburg Police Department, which brought in both county and federal investigators.
“The instant this incident was identified as fraudulent by City staff, the City’s Police Department acted quickly and immediately froze the account to which the funds were electronically wired,” said Pittsburg Police Chief Phil Galer in a statement released by the city. “Given the nature of this cybercrime, we contacted related agencies and the FBI to tap all available resources.”
So far, $696,241 has been recovered and the city hopes insurance will cover the remainder.
An investigation into the crime involved 18 search warrants for 116 accounts across major technology companies, financial institutions and telecommunication providers, the city said.
“Evidence identified the primary overseas suspect responsible for compromising the City’s email system is based in Nigeria with at least two criminally affiliated U.S.-based suspects,” the city said.
The investigation remains active as the FBI and the U.S. Attorney’s Office have accepted the case for continued investigation domestically and overseas.
“Sadly, Pittsburg has joined a long list of public agencies successfully targeted by international crime rings with cyber-based financial crimes,” said Mayor Dionne Adams. “This crime is both upsetting and a hard lesson for how we can improve our security. I share the community’s disappointment that criminals were able to exploit our systems.”
As a result of the breach, the city strengthened its internal controls related to financial processes, it said.
