The city of Pittsburg, California, was defrauded of $913,000 in a phishing scam that involved impersonating a construction company and a city employee. The funds were earmarked for the development of the city's Dream Courts sports and recreation complex.
Officials discovered the theft five days after the payment was wired on Feb. 12, when the actual construction firm, Discovery Builders Inc., inquired about the missing payment. The scam was perpetrated through a subtly altered email address for Discovery Builders, which contained an extra lowercase "l." Investigators believe the fraudsters subsequently hacked the email account of Sara Bellafronte, an assistant to the city manager, to impersonate her.
In the impersonation, the scammer, posing as Bellafronte, sent messages to a city finance employee. The fake Bellafronte claimed to have verbally confirmed updated banking information for Discovery Builders and instructed the employee to make the change, leading to the fraudulent wire transfer. The money was then rapidly moved through a series of accounts, prompting an FBI investigation.
Authorities issued 18 search warrants across 116 accounts and traced the money to two individuals in the United States and one in Nigeria. No arrests or public identifications of suspects have been made. The FBI was able to freeze the account that initially received the city's money, recovering approximately $696,000.
An Illinois man appears to have been an unwitting participant, court records indicate. Believing he was working for a legitimate company named "Tyco Alloy Industries," he moved the funds and purchased about $217,000 worth of bitcoin, which was then sent to a cryptocurrency wallet. The city is reportedly seeking insurance coverage for the remaining $218,000 that is still missing.
Discovery Builders President Louis Parsons described the perpetrators as "sophisticated" and expressed sympathy for the city's predicament. The construction company has since implemented a system where a representative physically collects checks from the city. Discovery Builders, a Seeno family company, eventually received the full $913,000 within 60 days of being notified of the scam. The Dream Courts project, approved in 2020, is a planned 42,000-square-foot facility intended to boost sports tourism. Construction has been delayed by rising costs and labor union negotiations.
Maya Dionne Adams, the mayor of Pittsburg, stated that the incident was "upsetting" and served as a "hard lesson" on improving security. She added that criminals were able to exploit the city's systems. The city faces an estimated financial loss of approximately $100,000, according to The Mercury News. Pittsburg officials released details of the scheme on a Wednesday, indicating that doing so would no longer jeopardize the investigation. The city has since enhanced its payment verification processes, modified financial workflows, and adjusted IT staffing levels.