Monadnock Beat

Peterborough Town Administrator answers questions on email scam that has cost the town $2.3 million


The Peterborough Town House/Photo by Meghan Pierce

Editor’s note: Monadnock Beat reached out to Peterborough Town Administrator Nicole MacStay Tuesday regarding the news about the email scam perpetrated against the town. What follows is our questions and MacStay’s answers.

Monadnock Beat: Why did it take a month for the town to release this information?

Peterborough Town Administrator Nicole MacStay: Until last Wednesday (August 18th) we did not have enough information to be able to determine what exactly had happened, other than to say that the diversion of funds had occurred.  Our initial investigation into ConVal’s misdirected payment did not uncover the source of the fraud, i.e. were the criminals US-based, overseas, or within one of our organizations.  When we learned less than a week ago that Beck & Bellucci payments had also been misdirected that provided us the additional information needed to trace the forged email exchanges to reveal that it was indeed our staff who had been targeted by criminals operating overseas.  

MB: Will taxes go up because of this?

MacStay: We are working to recover the losses through insurance; the town does have coverage for losses that occur as a result of outside fraud.  If those losses are not covered we will explore other options. 

MB: Will anyone be terminated because of this?

MacStay: I cannot comment on personnel matters, except to reiterate that we have no reason to believe that any members of our staff were criminally involved. 

MB: I would like to ask you about how the thieves conducted the scam. Were they posing as school staff and or as staff for the contractors? Also, did they hack into these email accounts and email that way? Or did they use different emails and if so how did that get by town staff? 

MacStay: They posed as staff of multiple organizations.  I cannot comment any further as it is the subject of the ongoing investigation. 

MB: How many town staff members were involved with this scam? Are we talking about one person from the finance department or more? Were any other departments involved?

MacStay: I cannot comment on personnel matters, and the targeting was focused on Finance Department staff. 

MB: Is it not town procedure to verify verbally a change in bank and routing numbers for payments? Is it now? Will town policy change in the future?

MacStay: I am unable to comment specifically on the Town’s security policies and procedures as doing so may open our town or other communities who operate in a similar manner to future attacks.  I can say that all policies and procedures related to electronic transactions are under review. 

MB: How did this happen three times?

MacStay: Vendor payments are processed on a weekly basis; we were alerted to the misdirected ConVal payment after it had been processed in July, and alerted to the misdirected Beck and Bellucci payments after the July and August payments were processed. 

MB: Will Selectmen be answering questions at an upcoming meeting over this?

MacStay: I cannot speak for the Board, but I expect that this incident will be a topic of discussion at upcoming Select Board meetings. 

MB: And again, how will this impact residents?

MacStay: Until we get a decision regarding coverage of the losses, it is unclear what the impact on the residents will be. 

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