- Fresno lost more than $600,000 to phishing scams in 2020.
- The jury found that the department failed to notice red flags on contractor invoices.
- Mayor Jerry Dyer said the city has since improved training and updated anti-fraud procedures.
The city of Fresno lost more than $600,000 to phishing scams in 2020. Now a grand jury says city officials should have realized the fraud before taxpayer money was lost.
City officials discovered the fraud when they noticed that invoices from contractors working on parts of the Fresno Police Department were fake, according to the Fresno Bee.
The contracts had the actual contractor's letterhead on them, but the account number was incorrect, according to the Bee. City officials didn't comment publicly until a 2022 report by the Bee revealed the fraud.
A civil grand jury found Thursday that the city failed to notice “clear red flags” that should have made it aware of the fraud, The Bee reported.
According to the Bee, the jury found that the city's finance department followed policies that were “understood” through training but not documented. Employees also were supposed to get approval from other employees before making large payments, but did not get that approval before making the fraudulent payments, the jury said.
“Phishing” attacks are usually carried out by criminals who send emails or other messages pretending to be from companies or individuals requesting credit card information, passwords or other sensitive information. The goal of the scam is to trick you into sharing personal information so the scammers can gain access to your computer, business or finances.
A Harvard Business School study predicts that phishing scams could “significantly increase in quality and quantity over the next few years” as AI makes it possible to automate “the entire phishing process.”
Earlier this month, scammers targeted a small town in Idaho, stealing more than $1 million from the town government in a similar scam, where criminals tricked city employees into thinking they needed to update payment information for a city contractor.
Fresno Mayor Jerry Dyer, who was not in office at the time the fraud allegations occurred, did not immediately respond to Business Insider's request for comment on Sunday.
In a statement, the mayor told The Bee that the city has already implemented many of the jury's recommendations in the wake of the case, including implementing new training.
“I appreciate the civil grand jury's time and attention to an issue of such great importance to our city and our country,” the statement said. “I am also gratified that the grand jury is confident that our internal updated procedures appear appropriate to prevent this type of fraud from happening again.”
