Iowa State Auditor Rob Sand has issued a warning to school districts and government entities about the increasing threat of check scams and fraudulent emails designed to redirect payments. Recent incidents involving two Iowa school districts serve as examples of this type of fraud. In one case, scammers used a Business Email Compromise (BEC) tactic, tricking the district into sending payments to a false address, resulting in a loss of around $100,000. In the other instance, perpetrators created counterfeit checks using the district’s account and routing numbers, successfully cashing two checks worth $10,400. Sand says these scams are part of a broader trend, with a nationwide alert from the Financial Crimes Enforcement Network (FinCEN) highlighting a 23 percent increase in check fraud complaints from financial institutions in 2021 compared to the previous year. To combat these threats, Sand’s office advises vigilance, careful monitoring of financial accounts for irregularities, independent verification of payment redirection requests, and establishing policies and procedures to prevent fraud in public entities. The FBI has also prioritized addressing the BEC threat, given the significant increase in losses associated with these crimes in recent years.
State Auditor Warns Of Increasing Threat To Public Funds Through Business Email Compromise Schemes
