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The city of Ellensburg quite literally handles thousands payment voucher requests during the course of doing business. But city employees were caught off guard in a cyber threat and paid $185,897 to a fraudulent account representing a construction company.

According to City Finance Director Jerica Pascoe, the city received an email from someone representing themselves as the accountant for an construction vendor. The existing business arrangement with the company was to pay the vendor with a physical check, but the email request asked for an electronic transfer instead. The documentation appeared authentic, she said, everything seemed in order, so the electronic payment was sent to a routing number at a Wells Fargo branch in Texas.

“Everything we do for Public Works projects is public,” Pascoe said. “So what’s happening is that these cyber criminals are going online and researching who we have for contractors and they’re copying their company logos, emails and phone numbers. So what happened is that they found one of our current contractors that we did have invoices out for, and represented themselves as them for payment.”

The scam was discovered when the fraudulent accountant came back at the city again, saying the transfer had been rejected by the bank and new account information would be provided. The red flags went up and further investigation indicated the payment was not going to the intended vendor.

“I think everybody is vulnerable in this day and age. It’s too easy to get information anymore,” City Manager John Akers said. “We’re an open book when it comes to records. There’s enough information out there that you can find out what our payments are, what our contracts are and who we’re dealing with.

“So I think public agencies are particularly vulnerable, but private individuals are just as vulnerable.”

City Attorney and Assistant City Manager Terry Weiner said, “The city does carry insurance to cover theft. There is a deductible, but we will file a claim in attempt to recover the amount that was lost.”

The matter has been reported to local and state law enforcement agencies as well as the FBI, Pascoe said.

The incident will not cripple the city’s way of doing business, but it will be more observant to current safeguards already, as well as looking into different layers of protection in the future.

“We actually have steps in place internally in processing the payment,” Akers said. “In the future, if we receive a request through the email system or electronically for a change of any kind in vendor information, we’re going to make direct contact with the vendor and confirm that is in fact their desire.

“If somebody wants to change their address or routing number or anything like that we’re going to be making a call to confirm, even if it’s somebody we deal with all the time. In this particular instance, if we had done that this wouldn’t have happened.”


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