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How scammers used ‘social engineering’ to steal more than $1 million from an Idaho town of fewer than 4,000 residents

US dollars American bills in bundles on a bright yellow background.

An Idaho town lost more than $1 million to scammers.Aleksandr Zubkov/Getty Images

  • Scammers tricked Gooding, Idaho, workers into sending more than $1 million to fake contractors.

  • The payment was intended for a wastewater project, but was diverted to the criminal’s account.

  • The Gooding Sheriff’s Office and the FBI are investigating, but getting the money back could be difficult.

A small town in Idaho just accidentally gave away more than $1 million.

Officials in Gooding said this week that an employee sent a $1,092,519 payment intended for contractors working on a wastewater project, but it went to scammers instead.

Gooding has a population of about 3,700, so that’s no small oversight.

According to a city news release, the scammers posed as representatives of a contractor hired by city officials, using a tactic called “social engineering” to gain the employee’s trust.

Social engineering fraud broadly refers to techniques to gain and then exploit someone’s trust, usually through social media. Scammers often gain trust by pretending to be someone they know or a company they do business with.

In the Idaho case, after gaining the employee’s trust, the scammers told the employee that bank information needed to be updated before the payment could be sent.

“In this case, the request to change payment information was made with legitimate-looking documentation,” city officials said. “The conspirators then waited for the city to transfer the seller’s payment. After the funds were unknowingly deposited into the scammers’ account, they were diverted to another account.”

The city’s bank says it has not yet recovered the money.

It is notoriously difficult for banks and law enforcement to recover money lost to scammers. Police in Florida said they were only able to recover about $40,000 after an elderly woman lost more than $400,000 in a fake sweepstakes scam in April.

“You go and get subpoenas and then the bank takes the time to get data back. The money is gone, long gone,” the local sheriff said at a press conference at the time.

If you lose money to a scammer, the Federal Trade Commission recommends asking the payment service (credit card, bank, or transaction app) you sent the money to to get the money back.

The Gooding Sheriff’s Office and the FBI are investigating the incident, the city said.

The FBI’s Salt Lake City office — which oversees investigations in Idaho — did not immediately return a request for comment from Business Insider.

Read the original article on Business Insider

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