Crooks hacked into a New York Department of Education electronic bank account used for petty cash and stole around $644,000 over a four-year timeframe.
The money was siphoned from a Small Item Payment Process (SIPP) account at JPMorgan Chase between October 2003 and February 2007 using electronic fund transfers (EFTs), the report by the Special Commissioner of Investigation for the New York city school district found.
The man behind the theft, Albert Attoh, gave various participants the account and routing information so they could use it to pay their bills with DoE money. In return he took cash payments.
Attoh took advantage of an oversight which meant that although the account was supposed to be limited to purchases of less than $500, there was no limit on EFTs used for paying bills because the DoE failed to set up a block.
Attoh has already pleaded guilty and been sentenced to 364 days in federal prison for bank larceny and ordered to pay over $275,000 in restitution.
The scam was finally uncovered when an unidentified woman alerted Chase that someone was attempting to pay bills using the SIPP account. The perpetrators were identified and led authorities to Attoh.
"It is difficult to understand how the DOE accumulated years of account statements, reflecting hundreds of thousands of public dollars spent to pay bills, but did not review them. A cursory examination would have shown that the charges were not normal school expenses," says the report.