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Norwich says employee fell victim to cyber scam that diverted town money



Valley News Staff Writer
Tuesday, September 10, 2019

NORWICH — A town employee was victimized by “a sophisticated scam” that led to an undivulged amount of money being transferred out of Norwich’s general fund, Norwich Police Chief Jennifer Frank said on Tuesday.

In an update emailed to Norwich residents on the town listserv, Frank said the investigation that started on Aug. 29 has “revealed that a town employee had fallen victim to a Business Email Compromise scheme (BEC), a sophisticated scam that targets both businesses and individuals who perform legitimate transfer-of-funds requests.”

Frank and Town Manager Herb Durfee declined to say how much money the town may have lost or to identify the employee involved, citing the ongoing investigation.

However, Durfee last week said a town employee had been placed on paid administrative leave as part of the investigation and that Norwich had hired former longtime Finance Director Roberta Robinson, who retired in June, on a short-term contract to run the Finance Department day-to-day.

Finance Director Donna Flies, who replaced Robinson earlier this summer, has not been in the office this week and last.

Norwich called in the FBI and the U.S. Attorney’s Office late last month to help with the investigation after longtime Treasurer Cheryl Lindberg noticed some unusual financial activity.

Frank’s update said a business email compromise scheme involves a “scammer” who “compromises legitimate business or personal email accounts through social engineering, computer intrusion, or fraudulent creative account swaps to conduct unauthorized transfers of funds.”

The FBI said such scams, which also can be a form of what’s known as “phishing,” have cost nonprofit groups, churches, school systems and large corporations “billions of dollars” and rely “on the oldest trick in the con artist’s handbook: deception.”

“But in just about every case, the scammers target employees with access to company finances and trick them into making wire transfers to bank accounts thought to belong to trusted partners — except the money ends up in accounts controlled by the criminals, the FBI says on its website.

Frank in a phone interview said town employees have fully cooperated with the inquiry.

“We’ve spoken with multiple town employees, including the finance director, and all are cooperating with this process and the investigation,” said Frank, who indicated the money may have been wired outside of Vermont.

Her update to residents included several recommendations to avoid falling victim to such scams, including:

■using secondary channels or two-factor authentication to verify requests for changes in account information;

■ensuring that the URL in emails is, in fact, associated with the business it claims to be from;

■watching out for hyperlinks that may contain misspellings of the actual domain name;

■and monitoring personal financial accounts regularly to make sure there are no missing deposits or other irregularities.

Meanwhile, Norwich officials learned this week that $614 in phone bills for the months of July and August hadn’t been paid by the Finance Department, prompting Robinson to pay it with the town credit card to avoid having phone service to Tracy Hall shut off, according to a memo sent Monday from Durfee to the Selectboard.

Phone service to the Department of Public Works, police or fire would not have been affected, Durfee said.

Durfee said Flies, as finance director, also had been contending with tax payments in August, and that the unpaid phone bills were a blip that occurred as she was “trying to come up to speed as the finance director.”

A part-time finance assistant position has gone unfilled this summer, in part because Flies and Robinson overlapped in June to help with the transition, Durfee said.

Flies, who is paid $64,973 a year, could not be reached for comment last week or on Tuesday. She lives in Williamstown, Vt., according to her Facebook page, and co-owned a barbecue restaurant there with her husband that closed several months ago.

She previously worked as a senior staff accountant at Central Vermont Home Health & Hospice; as a senior accountant for the city of Burlington; and as an accounts payable and payroll manager at Sugarbush Resort, according to her LinkedIn profile.

John P. Gregg can be reached at jgregg@vnews.com.