Last year, the city of Dunedin fell victim to a sophisticated scam that resulted in the theft of $663,000. Pinellas County Sheriff Bob Gualtieri detailed the nature of the incident to the Dunedin City Commission, stating, "This was a very deliberate and intentional, well-organized scam by people who are very experienced at this," in a statement obtained by the official city website. The funds were stolen by fraudsters posing as a contracted paving company, a deception that has since led to one arrest.
In response to the breach, Dunedin officials have moved to significantly enhance internal controls over Automated Clearing House (ACH) payments to vendors. Their new measures are aimed to both prevent a recurrence of such an event and to ensure that if someone attempts to intentionally defraud the city, they will find to have much more difficulty in succeeding. Among implemented changes are a mandated checklist for initiating new ACH or changes, with multiple levels of review, and a requirement for vendors to submit current banking information directly to the Purchasing email. Staff must also call and email to verify the information before any changes are processed.
The city manager, Jennifer Bramley, expressed confidence in the newly established protocols, "We’ve put plenty in place and we’ll remain vigilant," as conveyed on Dunedin's official website. Dunedin's strategy includes a multi-step verification process that involves notarization of ACH forms by a CEO, CFO, or company president and confirmation calls made directly to numbers listed in the existing vendor files.
In addition to more stringent controls, the city maintains a self-insurance Risk Fund aimed to cover a variety of financial losses, encompassing those caused by cyberattacks and fraud. It also holds specific insurance policies to protect against theft, electronic crime, and employee malfeasance. Fortunately, a portion of the stolen money was recovered, another part was replenished via the city's crime insurance policy, and the remaining amount was covered by the Risk Fund reserve. With their finances back in order, Dunedin has made it clear that they are not only ready to aptly handle any future attempts of theft but to proactively reduce the chances of it ever happening again.
