Shire of Broome victim of $368,000 ‘elaborate fraud’
Shire of Broome staff have been hoodwinked into paying $368,000 to scammers.
Broome Detective Senior Sergeant Gerry Mungall confirmed police were investigating a “very elaborate” fraud on behalf of the council.
He said invoicing fraudsters assumed the identity of a local building company and the money was subsequently transferred.
“This is similar to other scams, which are going around Australia at the moment,” he said.
Shire acting chief executive Sam Mastrolembo said the vast majority of funds had been recovered and “the Shire was pursuing avenues to recover the remainder”.
“In this instance the Shire’s current procedures were followed, however during the process a fraudulent document was provided by an external party facilitating the fraudulent act,” he said.
Mr Mastrolembo said an internal review had been conducted “to ensure the incident cannot be repeated” and that an independent auditor had also been engaged to conduct an external review of the payment processing function.
It was unclear where the money had been sent.
The council has a checking procedure involving invoice payments but the sham application managed to fool accounts staff.
Det Sen Sgt Mungall, who is the acting officer-in-charge at Broome Detectives, said the Fraud Squad was following other lines of inquiry but would not elaborate.
“There have been other scams involving companies throughout Australia, which usually results in money going overseas,” he said.
“I can’t really say if this is one of them because this aspect is still under investigation.”
Det Sen Sgt Mungall advised companies with any doubts over invoice changes to make manual checks to ensure the information was correct.
“If payment methods change in any way, including bank accounts, bills or letter heads, then we would advise companies to go to a trusted person within the other company and verify the details,” he said.
“Invoices should be cross referenced with existing information and checked, and double checked.”
He said companies must now assume a wealth of public information was now freely available on the internet including successful tenders, contractors, and payment cycles.
“A lot of these scammers are setting-up fake websites, which they will direct companies to go to,” Det Sen Sgt Mungall said.
“They can get letter heads made up and they can get official letter heads from the companies themselves and fake them.
“Companies have to be very mindful scammers will have knowledge of the work they do and their contracts because nearly everything is now available on websites and is public knowledge relating to contracts and tenders that have gone out.”
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