Scammer takes over $70,000 from Sugar City
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SUGAR CITY — A scammer took tens of thousands of dollars from Sugar City last week.
The city clerk is reported to have accidentally sent $77,000 to the scammer using a wire transfer to a fraudulent account on Wednesday. The theft from the city became public after the Madison County Sheriff’s Office listed the item on a weekly crime report.
“There was an invoice issued from an asphalt company. … Our city clerk thought it was a legitimate invoice and almost as soon as she paid it, she realized there was something wrong with it,” Sugar City Councilwoman Catherine Nielsen told EastIdahoNews.com. “There was like one letter different on the email.”
Nielsen said Sugar City was working with a contractor to complete a road resurfacing project at the time and received an invoice for the amount approved by the city.
“Our mayor made the comment, ‘This is one of the best scams’ he has ever seen,” Nielsen said.
As soon as the clerk realized something was wrong, she contacted investigators.
Sugar City Clerk Wendy McLaughlin could not be reached for comment.
Sugar City’s credit union is trying to get the money back if possible. Nielsen said the other bank where the wire transfer went through has not stopped the payment, leaving only a 50/50 chance of getting the money back.
“It pretty much wipes out our street and road budget for right now,” Nielsen said. “It will be a real strain, but we’re not in any danger of bankrupting the city or anything like that right now.”
Nielsen explained if the money taken by the scammer completely disappears, the city will need to take a look at cutting some areas of the budget even though Sugar City received some extra funds this year from the Association of Idaho Cities.
“It brings forward to the community the fact that no matter who you are, you can have issues with this sort of thing,” Nielsen said.
To prevent a scam from happening again in the future, the city is implementing new procedures that require two signatures to double-check the invoices before sending any money to anyone. The city accountant and IT professionals are looking at additional ways to prevent being scammed again.
“We’re optimistic that we can overcome this problem, and it won’t happen again,” Nielsen said.
Sugar City Mayor Steven Adams said he could not comment on the issue until authorities are further along in the investigation. Madison County Sheriff’s Office spokesman Sgt. Isaac Payne said detectives are still looking into the incident. Nielsen said the city is working with the FBI. A spokesperson with the bureau could not comment on the matter.
This is not the first time an eastern Idaho public entity has fallen to this type of scam. In 2018, the Teton School District 401 paid $784,833 through an electronic payment to someone posing as a construction company under contract with the district. A bank was able to get the district back about $484,000 of the stolen funds.