Mansfield Finance Director Reports Near Full Recovery of $748K Lost to Email Fraud

Kelly Converse, the Finance Director of Mansfield, addressed the City Council on Tuesday, expressing confidence that the city will recover the entire $748,145 lost in a fraudulent email phishing scheme that occurred in May.

 

In an email update, Converse detailed the incident, explaining that an individual impersonating a vendor's chief financial officer contacted the finance department, requesting an update to banking information used for electronic deposits. Believing the request to be legitimate, a department employee processed the change, leading to the misdirection of a payment intended for the vendor.

 

The fraudulent payment was sent on May 22. The receiving financial institution flagged the transaction as suspicious, froze the account, and reported the incident to the city's bank. However, Mansfield officials were not notified until May 29.

 

Converse reported that through collaboration with law enforcement, banking partners, and insurance carriers, the city has recovered most of the funds:

 

$536,320 was traced and successfully recovered by the bank where the fraudulent account had been opened. Converse noted that such a recovery is rare.

 

$200,000 was reimbursed through the city's primary insurance coverage.

 

The remaining $11,825 has been submitted under a separate insurance policy, with confidence in reimbursement.

 

Converse expressed gratitude for the swift and diligent work of financial institutions, insurers, and investigative partners in securing the recovery. She emphasized the department's commitment to strong internal controls and funding safeguards, having finalized and implemented a Payment Security and Fraud Prevention Policy.

 

The city continues to work with IT, city administration, and law enforcement partners to enhance defenses against increasingly sophisticated cybercrime threats.

 

FAQ

 

What measures has Mansfield implemented to prevent future email fraud incidents?

 

The city has finalized and implemented a Payment Security and Fraud Prevention Policy and is collaborating with IT, administration, and law enforcement to enhance cybercrime defenses.

 

How was the fraudulent payment detected?

 

The receiving financial institution flagged the transaction as suspicious, froze the account, and reported the incident to the city's bank.

 

Is the city confident in recovering the remaining funds?

 

Yes, the remaining $11,825 has been submitted under a separate insurance policy, and the city is confident in reimbursement.