Three million in district funds stolen; $2.5 million recovered

FBI investigation underway  

Jan. 5, 2010—The Duanesburg Central School District announced today that it is working closely with the Federal Bureau of Investigation and New York State Police Cyber Crime and Critical Infrastructure Unit to investigate unauthorized electronic transfers of school district funds from its NBT Bank account.

The district first learned of the fraudulent activity on Tuesday, December 22, when contacted by an NBT bank representative, questioning the validity of a request for an electronic transfer of funds to multiple overseas accounts that day. Upon confirming with the district that the transfer was not authorized, the bank immediately cancelled the pending transaction, which totaled approximately $759,000.

After further review, it was discovered that an additional $3 million in unauthorized electronic transfers to various overseas banks had already been executed over the previous two business days, between December 18-21. Both district officials and the bank immediately contacted the FBI, which opened an investigation along with the state police.

To date, $2.5 million of the stolen funds have been recovered by NBT Bank, working with several overseas financial institutions.

“Thanks to NBT Bank’s aggressive pursuit of the stolen funds, we are fortunate that the vast majority of the money has been recovered,” said Duanesburg Superintendent Christine Crowley. “However, $497,200 of Duanesburg taxpayers’ money is still missing, and we are committed to doing everything in our power to recover the remaining funds.”

To prevent any district bank accounts from being further compromised, the district closed all of its bank accounts and established new ones with restricted online access.

This information has been shared with staff, distributed to the community via School News Notifier, and a letter is being sent home with students today.

The district is cooperating fully with the ongoing investigation by the FBI and New York State Police.

View a list of questions and answers about the online theft of funds from a Duanesburg Central School District bank account. As soon as more information becomes available, it will be posted on the Web site.