Cabarrus County defrauded of $1.7 million

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Cabarrus County has informed residents that the government has been the victim of a social engineering scam built around a contracting payment.

The county intended to send $2,504,601 to Roanoke, Virginia-based Branch and Associates, Inc. in payment to the general contractor. Branch is overseeing the construction of West Cabarrus High, a new school for the Cabarrus County Schools District.

After the funds were transferred, the county discovered that it had been the victim of a social engineering scam by people falsely posing as Branch employees. Beginning in November of 2018, the fraudsters began sending e-mail to the county, informing the government that Branch had updated its vendor banking information. The account information provided to the county was for an account not affiliated with Branch.

According to the county, the new banking details and accompanying documentation seemed valid and the change was approved, so when the next transfer payment occurred it was diverted to the scammers. An investigation into the fraud reveals that the funds were then diverted through multiple accounts.

The situation was noticed after the county received a courtesy notification of a missed payment from Branch in January 2018.

“The county notified SunTrust, the bank from which the funds were transferred, and followed their recommended procedures. Branch and Associates notified Bank of America, the bank to which funds were transferred, which froze $776,518.40 of the $2,504,601 that remained in traceable accounts. Cabarrus County also consulted with its insurance vendors,” explains a statement issued by Cabarrus County.

The county made good on the missing payment to Branch, but a total of $1,728,082.60 was unable to be recovered from the fraudsters, and the Cabarrus County Sheriff’s Office and the Federal Bureau of Investigation are still investigating the case.

Construction on the school was not affected by the situation.

 

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