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Manchester Public Schools Lose $180K to Hacked Vendor

A Connecticut school district made three payments, totaling roughly $180,000, to a potentially fraudulent bank account between Nov. 3 and Nov. 17 after one of the district's vendors was hacked.

(TNS) — School district officials say a vendor's breached email led to $180,000 in electronic transfers mistakenly made to a bank account not associated with that vendor in November, an incident Manchester Police are investigating.

Superintendent Matthew Geary and Board of Education Chairman Chris Pattacini sent a letter to parents and other Manchester Public Schools community members on Dec. 5, detailing what the district knew about the situation at the time and how the possible fraud occurred.

"Last week we were notified there was an issue with three electronic funds transfers to one of our vendors," the letter stated.

The letter indicates three payments, totaling roughly $180,000, were sent to a potentially fraudulent bank account between Nov. 3 and Nov. 17. Officials said that although police and the school's insurance company are actively investigating, initial information suggests that a vendor was hacked.

"While the investigation is ongoing, we have put additional precautions in place, including but not limited to the temporary stoppage of electronic funds transfers," the letter stated, adding that the district would work with its own crime and cyber insurance carriers as well as town staff to adjust its processes as necessary.

The letter states that members of the public have raised questions in the days following the district's discovery of the fraudulent payments.

"When an investigation is ongoing, we do not typically share information publicly in order to preserve the integrity of the investigation," the letter states. "However, due to the speculation surrounding this issue, we felt obligated to share the current facts as we know them."

Officials said more information would be provided once the investigation has concluded.

Lt. Ryan Shea of the Manchester Police Department said last week that there is an open investigation into the incident, but that he could not provide any information on its status.

Geary said Monday morning that police and the school's insurance company are still investigating.

Members of the Board of Directors discussed the situation at a meeting on Dec. 5, where Minority Leader Zachary Reichelt and Director Ed Boland voted against a slate of seven school board grant allocations totaling roughly $2.9 million.

All other members of the Board of Directors voted in favor of the seven allocations, with Deputy Mayor Sarah Jones abstaining from four of the votes.

Reichelt said he would like to hold a special joint meeting with the Board of Directors and Board of Education to discuss the fraudulent payments.

"We really, at the heart of it, want to be on the same page," Reichelt said.

Director Dennis Schain said cybersecurity and fraud are not problems unique to Manchester.

"People are on it and it's being addressed, and shouldn't impact our action on the items on the agenda," Schain said.

Boland echoed Reichelt's sentiments, and said he had concerns about allocating any more funds to the school district in the immediate future.

"I think we've got to be assured that there are stopgaps put in to be assured this doesn't happen again," Boland said.

Mayor Jay Moran said the funds should not be "(held) hostage" as a result of the incident, and the police investigation will ultimately provide the answers that directors are looking for.

©2023 Journal Inquirer, Manchester, Conn. Distributed by Tribune Content Agency, LLC.