Highland County Transfers More Than $450,000 to Phony Vendor after Failing to Implement Safeguards Against Payment Redirect Scams

Press Release •Ohio Auditor of State

COLUMBUS - A Highland County employee transferred more than $450,000 to a cybercriminal impersonating a vendor after the county failed to implement safeguards and training to ensure payment redirect requests were legitimate.

The incident led to a finding for recovery Thursday of $2,500 that was repaid under an audit of the county's finances from Jan. 1, 2023, through Dec. 31, 2023.

The full report is available online at ohioauditor.gov/auditsearch/search.aspx.

Auditors noted the September 2024 incident in which a county employee received a request from someone posing as a legitimate vendor to redirect payments to a different account. Two payments totaling $450,120.58 were issued to the fraudulent account before the scheme was discovered.

The county was able to recover $184,073.73 from the bank involved, and the county's insurance company paid $263,546.85 of the lost funds. Thursday's finding for recovery covering the county's $2,500 deductible was repaid under audit.

The Auditor of State's Office issued a bulletin in 2024 setting clear standards and expectations for public offices in handling payment redirect requests.

On the Highland County incident, auditors wrote, "Prior to accepting the changes to payment information, none of the bulletin's recommended steps were taken to independently verify that the request was legitimate. In addition, the county auditor had not adopted a policy or implemented training for employees in his office and in other county offices to recognize vendor redirect schemes."

Thursday's report included a second finding for recovery after the county's payroll clerk failed to remit and file portions of tax payments in fiscal years 2019, 2020, 2021, and 2023, leading to $1,100 in late fees and penalties.

Auditors wrote, "These charges would have been avoided had the withholdings been remitted by the required due dates by the payroll clerk."

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The Auditor of State's Office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.

Public Affairs Contact: Marc Kovac [email protected]