Cyber Crime Cost City $50,000

Huntington Bank was able to recover most of the $550,000 in city funds put at risk after the city was victim of a cyber crime late last year. 

Last October, ELi reported that a vendor the city did business with had its email compromised. The hacker then changed the routing information of the vendor to intercept the payment of a legitimate bill. East Lansing Communications Director Carrie Sampson responded to a request from ELi to provide an update on the situation. She said most funds were recovered and the ordeal has cost the city $50,000 total. 

“Huntington Bank was able to recover $381,022.85 of the City’s funds,” Sampson wrote. “The remaining $164,286.58, minus a $50,000 deductible, ($114,286.58) was covered by our insurance.”

The city has changed some practices to prevent this from happening in the future, Sampson said, though she did not say what practices the city has modified. 

Sampson did not provide more details on the incident, stating the city only wants to speak in general terms because an investigation is still underway.

When the city announced the crime happened last year, it said Michigan State Police and the Federal Bureau of Investigators (FBI) were working with the city to recover the funds and hold the responsible party accountable. A representative from the FBI declined to provide further details or confirm if an investigation is still underway when reached for comment.

“The FBI is aware of the incident and takes allegations of federal law violations seriously,” Jade Carter, multimedia specialist for the Detroit FBI branch wrote in an email to ELi on June 3. “However, it is the policy of the FBI not to confirm or deny whether or not it is conducting an investigation.”