December 6 – A small town in northern Idaho is scammed out of half a million dollars by a man posing as a construction contractor.
The city of Clark Fork, near the Clark Fork River Delta on Lake Pend Oreille, transferred $483,519 in grant funds in mid-November intended to pay for last summer’s excavation work as part of a multi-year water infrastructure replacement project, said Clark Fork Councilman Jay White .
After the payment was made, the contractor, Noble Excavating, based in Libby, Mont., became suspicious and alerted the city. Officials worked with the receiving bank to try to freeze and reverse the payment, but there was not enough money left in that account, White said.
White described it as a “man-in-the-middle” attack, where the scammer poses as an intermediary in the chain of custody of funds.
In this case, they posed as the contractor’s management in emails with the city engineer, Century West Engineering. The scammer convinced them of the need to transfer the money to another account.
The city had no reason to be suspicious, White said. Employees of the contractor attended the meeting in October where the council discussed and approved the payment. The city never had direct contact with the scammer, White said.
The FBI and Secret Service are investigating, he said.
Noble Excavating Project Manager Eric Drake said they also had no contact with the scammer. The company has not received any of the money, he confirmed.
“We’d like that; it’s a lot of money,” Drake said.
Century West did not immediately return requests for comment.
Funds for the project came from the American Rescue Plan Act through a grant from the Idaho Department of Environmental Quality. White said he is not yet sure what the next steps will be for the project or how to deal with the loss of federal funds, but the city is in contact with its attorneys and insurer to determine how to proceed.
White said he is still optimistic they will get the money back. A nearly identical scam swindled $1 million out of the southern Idaho city of Gooding this summer. Two months later, the FBI recovered most of the money after transferring it to another account, according to a news release from Gooding.
White said Clark Fork is looking at ways to improve its authentication methods. He said it’s a good reminder for people to learn how to protect themselves from fraud with basic cybersecurity precautions.
In 2023, the FBI Internet Crime Complaint Center received 21,489 complaints about business email compromise schemes with losses exceeding $2.9 billion.
James Hanlon’s reporting for The Spokesman-Review is funded in part by Report for America and by members of the Spokane community. This story can be republished for free by other organizations under a Creative Commons license. For more information about this, please contact the editor-in-chief of our newspaper.
