BUFFALO, NY (WKBW) — Erie County got scammed out of more than $100,000 taxpayer money after being tricked into paying a scam artist pretending to be a local construction firm.
“It’s not just disappointing — it's completely unacceptable,” respond Mark Poloncarz, Erie County Executive.
Poloncarz reacting to a scam that cost the county $108,000
In August, the Erie County Department of Works (ECDPW) received an email believed to be from Mark Cerrone, Inc., a local construction company, doing work at the Rath Building in downtown Buffalo.
That email asked for the county to change the bank routing number for payment.
But when the actual construction firm called the county asking for its payment, the county realized the email was fraudulent and the comptroller's office sent the money to a bank in Texas.
“Somewhere along the line the comptroller's office a mistake was made and it should just not happen,” Poloncarz reacted.
Director of operations at Cerrone, George Lodick, tells me hackers took the company's domain name and reversed two letters — from @markcerrone.com to @markecrrone.com, sending the fake email to the county.
Poloncarz says the comptroller's office is “responsible” for the payment.
But Comptroller Stefan Mychajliw says the mistake did not happen at his office.
He tells me that that scam email went to the DPW and that his office was only responsible for cutting the check.
“But if you're cutting the check or sending it for a business, would you verify it for a bank account?” Buckley asked.
“The department is responsible for verifying it — that's why DPW has accountants. That's why elected officials have accountants. That's why every single department across Erie County has their own accountants and their own team to do exactly that — our job is ministerial,” replied Mychajliw.
But Poloncarz says the county has protocols in place and the comptroller's office should have checked with the vender to confirm it changed banking instructions.
"You want to double check that. You want to contact the contractor, whoever the vendor is and confirm yes that they are in fact did change their banking instructions and banking information,” Poloncarz explained.
Erie County Attorney Michael Siragusa sent a letter to Erie County District Attorney John Flynn requesting a criminal investigation.
The letter stated in part "This situation involves potentially criminal activity with unauthorized individuals receiving unwarranted vendor payments from Erie County."
“We’re the ones that identified the problem. We're the ones that contacted the county attorney to make sure that those practices are improved and that departments, like DPW, are not duped by a scam email again,” remarked Mychajliw
Mychajliw says the county has insurance to cover this type of loss.
But Poloncarz also pointed out that all county employees are required to take on-line cyber security training to prevent this type of scam.
"We have a division of consumer protection to help people avoid scammers and here's the county falling for a scammer through the comptroller's office," remarked Poloncarz.
But Mychajliw is not taking responsible for the mistake.
“When the county executive said employees are trained on this and there should be protocols in place — how do you respond to that?” Buckley questioned.
“He’s right. His Department of Public Works and their accountants should never have fall prey to this email. I’m not blaming anyone. I’m not pointing fingers at them — it happened and the best thing we can do is strengthen our policies and procedures with those other departments, help them out as best as possible to make sure that this never happens again," Mychajliw responded.
"I think the buck stops always at the top and when I was comptroller — we didn't have a problem like this," Poloncarz replied.
Late Thursday afternoon, the comptroller's office offered figures of transactions it handled in 2020, indicating 217,755 in general account checks totaling $493-million were distributed last year.
They say it "provides a glimpse of volume in number of checks and amounts the comptroller's office handles each year."