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Kentucky City Investigates Employee Paycheck Cyber Fraud

Police are investigating a report that paychecks for a town employee were diverted to an incorrect bank through an apparent cyber fraud scheme, as part of a scheme that possibly went on for nine weeks.

A person opening a paycheck.
(Shutterstock)
(TNS) — Police are investigating a report that paychecks for a town employee in Saugerties, N.Y., were diverted to an incorrect bank through an apparent cyber fraud scheme.

Supervisor Fred Costello said last week the incident apparently involved the town being given instructions to change the deposit information. He added that the scheme went on for nine weeks before it was discovered by the employee.

"We were able to correct the fraud and ... capture a small part of the money that had been stolen," he said. "The investigation's ongoing with the hope that we're going to be able to secure restitution from the person who is the suspect in the activity. Because it's ongoing, I don't want to comment on it further."

Costello, who declined to identify the employee, said the amount diverted was more than $7,000 and two weeks of pay was recovered. The employee's full pay was restored, he added.

"We're going to pursue whatever legal avenues are available to us but it's hard to make a prediction about our success," he said.

Town Police Chief Joseph Sinagra said he would not comment while the investigation was being conducted.

Costello said the scheme included sending a request to the town's human resources office.

"I happy to say that these attempts are overwhelmingly captured and they do not have an impact," he said. "But folks who do this stuff are getting better and better at it and this one made it through the cracks."

Costello also said the town's information technology consultant routinely engages in sending false information and emails to employees to test whether policy is being followed.

"Our IT consultant engages our employees on a regular basis," he said. "We're going to learn lessons from this. There's going to be a tightening of the protocols to make sure that this never happens again."

© 2022 Daily Freeman, Kingston, N.Y. Distributed by Tribune Content Agency, LLC.