Hacker steals $378,000 from Poughkeepsie bank accounts

A hacker broke into a TD Bank account owned by the Town of Poughkeepsie on Jan. 12, stealing $378,000 by electronic transfers to accounts in Ukraine.

The Town kept the thefts secret until an announcement by Supervisor Patricia Myers on Feb. 3. According to a statement posted on the Town's website, the theft comprised four separate unauthorized transfers to banks in Ukraine. Town Comptroller Jim Wojtowicz discovered them the next day, prompting an investigation by the Town Police that is receiving assistance from the FBI and the Secret Service.

While most details of the investigation are being kept confidential, a press release made by the Town states that $95,000 of the stolen money has already been recovered from a Ukrainian bank. "We…remain optimistic that we will be able to recover $283,000 in stolen funds, and will aggressively pursue all available avenues as the investigation unfolds," reads the Town's statement.  

According to a Feb. 4 Poughkeepsie Journal article on the theft, no employees of the Town are currently suspected of involvement in the illegal transfers. Computer hacking is hard to trace, making it difficult for authorities to find those responsible. Town Police Chief Thomas Mauro told The Journal that "we're not sure if we'll ever know" how the theft occurred.

Recovery of funds in such cases is often complicated by the fact that hackers often transfer the stolen funds to yet other banks in other countries after the initial transfers.
The Town of Poughkeepsie, meanwhile, has placed some of the blame on TD Bank for its lack of oversight. "We find it unacceptable that movement, or attempted movement, of money from a Town account to an account in Eastern Europe did not immediately raise a ‘red flag' with the bank, was not questioned by anyone at the bank, but was simply processed," stated the Town's press release. It went on to express disappointment that no representative of TD Bank had visited Town Hall to discuss the issue.

The money was transferred from a cash disbursement account that the Town uses to pay bills. It remains unclear whether the Town will be able to seek compensation for the theft. Myers told the Journal on Feb. 5 that although insurance could perhaps cover a portion of the theft, the Town's coverage was "minimal in this sort of thing."

Myers was unsure whether the Town has an insurance policy specifically covering incidents of data breach, in contrast to policies covering theft by Town employees, for instance. The stolen funds, however, represent only a fraction of the Town's overall budget.
The theft is likely part of a trend of hackers breaking into municipality and school district accounts and transferring the money to accounts outside the United States. For example, hackers stole $3 million from the Schenectady County School District in New York in December.