Glens Falls Chronicle Serving the Glens Falls/Lake George region; Warren, Washington and northern Saratoga counties since 1980
By Cathy DeDe, Chronicle Managing Editor
At Friday’s monthly meeting of the Warren County Board of Supervisors, Sheriff Jim LaFarr shared with the County Board new specifics of the more than $3.3-million paid out last month to imposters purporting to be highway materials contractor Peckham Industries.
On December 12 and 23, the Treasurer’s office made electronic “ACH” [Automated Clearing House] payments of about $2.1 and $1.2 million to a scam banking account.
“The person engaged in conversations with several members of the treasurer’s office staff, solicited information, requested the opportunity to establish, and set up an ACH payment account.
“That person was directed on how to set up that account. The account was established and payments were made. Pure and simple, that’s all that took place. Computer systems were not compromised. Not a sophisticated intrusion. A series of errors.
“A simple call to Peckham, a known vendor that we have dealt with for years to verify this request to set up this account to a trusted number would have stopped that from happening. It would have never occurred.
“As I previously informed, on January 2, $1.2 million was recovered. It’s back in the county’s budget.
“Funds from the $2.1 million, they’ve been identified. Not all, some, have been identified, located, frozen — and we are optimistic that those funds will be returned to us.
“I know roughly what those funds are but it would be irresponsible of me to share what we expect to get back because there are a lot of unknowns.
“I will tell you we are working very hard to get those funds returned.
“I am also working very hard with our federal partners to identify assets.
“Because, I want to make sure, if we can’t get every penny returned through that (bank) process, I want to go after assets, seize items. I want it recovered in every lawful way possible. Our taxpayers should not be out one penny.
“We are working, still, very closely with the nys Police, Secret Service, fbi and other law enforcement partners to really build a strong criminal case.
“Not only do I want our money back, I want to have whoever is responsible to be held accountable. That’s what I do. I take it very personal.”
Sheriff: ‘Stop sharing, information,’ cites Norton by name
Sheriff LaFarr said, “If everyone could please stop making public comments. Stop sharing information. Allow us to be the…recipients of the information and the source of the release of any information.
“Some of the things being released are potentially harmful to our progress. They’re definitely making our work harder. So, please, can’t do anything about it but I’m imploring — please stop.”
Addressing “Miss Norton,” the County Treasurer, the Sheriff said, “Some of the information you’re sharing is alarming the public. And it’s hurting us. The messages you’re sending, the information you are sharing on social media…I know that you want the best product when we’re all said and done.
“Please direct any future communications to our Sheriff’s office to me…
“Sending a letter to one of our investigators and accusing them of political underpinnings — that’s not acceptable. We have two of our very best assigned to this case. They are working extremely hard. They have young families and they have already in these past few weeks sacrificed a lot fighting for you and your office. In this same letter that was sent to our investigator, the following statement was made, the Sheriff said, quoting, ‘We have concluded with disappointment in the process that the involvement of the Sheriff’s office in the investigation, based upon political statements, is not an investigation with which we have confidence.’
He said, “I don’t even know how to address that. I bring it to your attention because it’s insulting and unacceptable, baseless, unnecessary. The final time I’m gonna say it: Please stop.”
His football analogy
Sheriff Jim LaFarr opened his Jan. 16 address with “a couple of requests,” acknowledging, “It might not be my place.”
“We’re going to ask some hard questions. Some of the answers are not gonna be comfortable for some people. It’s not personal, it’s professional. I think we all want to get to the bottom of this. We want answers….
“In football, when the ball is fumbled, the players don’t turn to one another and say, ‘I’m not diving on that ball; I didn’t fumble it.’ Everybody dives for the ball.
“I’m asking everybody that’s involved, put your heads together. Let’s all work together and dive on this ball….
“The information that we uncover…it might be uncomfortable but it’s not meant to embarrass. It’s meant to inform our public. Pure and simple, that’s it.
“If one of my officers fails…I know the buck stops with me. I also know if I send them out to work and I don’t provide them with policies and guidance and procedures, 100 percent of that accountability falls on my shoulders.
“The fact is, Warren County fumbled the ball. They fumbled the ball without policies and protections in place to offer direction. There’s absolutely nothing political about that statement.”
Norton: Sheriff investigation is ‘one-sided’
By Cathy DeDe, Chronicle Managing Editor
Warren County Treasurer Christine Norton twice addressed the County Board at their Friday meeting, with her view of the investigation into the $3.3 million scam.
“I would like nothing more than a collaborative approach to this investigation. However it has not been collaborative since 12/26 and 12/30.
“I do not think the Sheriff is objective. He did not tell you objective facts. They were very one-sided. There were communication and control breakdowns from the very top of this organization and it is not just within the treasurer’s office.
“I do not think the Peckham fraud alert is white noise.
“Sheriff LaFarr likes to say this is a very basic fraud. A fraud alert from one of your largest vendors — that should signal some concern and that should be shared through the process. Information went between the DPW who had the fraud alert, and who saw the change from a check to an ACH.
“There’s more here than you are being led to believe. I would like for everyone to understand all the facts, and I think the only way we are going to get those facts is through the office of the State Comptroller.
“I would love to work collaboratively but it’s kind of tough when everyone is pointing at you.
“I also work for every taxpayer and every one of you in Warren County and so I think I have the right to talk to them and let them know when they are not getting all of the facts, or when the fact they are hearing are so one-sided and not even close to being objective.
“Make no mistake: Had the Peckham fraud alert been shared as requested in the letter with the treasurer’s team and with everyone in the payment chain as well as others, this fraud would never have happened.”
Scam investigation:
County Attorney ok’d to share conversations about the making of wire transfer policy.
The Warren County Board of Supervisors passed a resolution at the end of last Friday’s meeting that allows County Attorney Larry Elmen limited waiver of attorney-client privilege to reveal conversations and emails about the making of the County’s wire transfer policy, as part of investigation into the $3.3 million scam.
County Treasurer Christine Nolan and her staff helped craft the County’s wire transfer policy.
As the policy made its way through committee, Mr. Elmen had publicly and pointedly thanked “the Treasurer and her office” for their efforts.
Friday, there was no public discussion by the board about the waiver, which came after about a 40-minute executive session closed to the press and the public.
County Communications Director Don Lehman later told The Chronicle, “We can’t comment on it or elaborate beyond what is in the resolution.”
The County’s new wire transfer policy was passed by the full board on December 19 — between the first and second scam payments, it turns out.
— Cathy DeDe
$3.3 million scam triggers 4 inquiries
Warren County expects four investigations will look into what happened and what should be done now after the County Treasurer’s office paid out $3.3 million in a wire transfer scam.
- The County has requested a forensic audit by the State Comptroller’s office. Warrensburg Town Supervisor Kevin Geraghty, Chair of the County Board of Supervisors sent a letter asking Comptroller Thomas DiNapoli to look into the County Treasurer’s Department, including “Automated Clearing House payments, wire transfers, protocols and procedures followed by that office,” and “to ensure the County’s financial operations are sound and consistent with…best practices.” Mr. Geraghty tells The Chronicle the County has not yet received an answer from the Comptroller.
The full scam amount was $3,358,434.88, Mr. Geraghty wrote in his letter to Comptroller DiNapoli.
To date, $1.2 million has been recovered. Sheriff Jim LaFarr says he is “optimistic” more will be returned.
Currently underway:
— Cathy DeDe
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