City Of Minnetonka: Minnetonka Alerts Authorities To Online Phishing Scheme

Press release from the City of Minnetonka:

10/21/2021 12:50 p.m.

The City of Minnetonka has alerted federal authorities to an online phishing scheme that appears to target local governments. The specific case involves attempts to defraud the city of more than $1 million by someone posing as a vendor that does frequent business with the city. Investigators say an individual purporting to be an official with the company emailed the city several times requesting payment on outstanding invoices. The person had intimate knowledge of open contracts and due dates.

Minnetonka city officials alerted investigators to the fraud as well as the bank holding the payments. Authorities were able to place a hold on any pending transactions from the fraudulent account and recover all but $143,379.

The case remains under investigation. While efforts to recover the outstanding funds continue, the city also has fraud insurance that will cover the lost funds. Federal investigators have advised the city that the phishing activity could possibly be the result of the vendor’s email system being compromised.

City of Minnetonka finance leaders have conducted an internal review of policies and procedures related to electronic payments. They will provide the city council with an overview of cyber and physical security practices during the council’s next study session on Monday, Oct. 25.

Minnetonka citizens should also continue to take steps to follow cyber security best practices. The FBI recently reported a nearly 70-percent increase in cyber-based fraud in its most recent analysis. Agents report a sharp increase in illegal campaigns that target individuals and businesses in the midst of COVID-19 pandemic as more payments are made online. Read the FBI’s most recent Internet Fraud Report.

This press release was produced by the City of Minnetonka. The views expressed here are the author’s own.