Warren County’s misspent millions

By Cathy DeDe, Chronicle Managing Editor

Warren County said in a Dec. 31 press release it “was the victim of a financial crime through a fraudulent phishing scheme” earlier in December.

It said, “Two electronic payments in the amounts of $2.1 million (December 12th, 2025) and $1.2 million (December 22, 2025) were transmitted to a fraudulent bank account by the Warren County Treasurer’s Office.”

The $3.3-million was intended for road materials supplier Peckham Industries.

Last July Peckham sent an alert by mail and e-mail warning about potential fraud.

County Treasurer Christine Norton, who began her elected four-year term in 2024, said that alert was not shared with her office.

County Sheriff Jim LaFarr is leading the criminal investigation, “working very closely,” he said, with the State Police, State Police Computer Crimes Unit, and the United States Secret Service.

“In really brief terms,” Sheriff LaFarr told the County Board at its January 6 organizational meeting, “our Treasurer’s Office received a call from a person alleging that they were a representative of Peckham Materials Corporation.”

“This person was calling to request the ability to establish an ACH, which is an automated clearing house payment vendor account,” for electronic wire transfers.

“However, the account was established using fraudulent information,” the Sheriff said.

The Sheriff told the Board, “Through our interviews with Treasurer’s Office staff, we learned that Treasurer Norton wanted to commence the process of completing ACH payments. I’m not going to get into as to why. That’s her area of expertise. I’m going to stay in my lane and let her explain why that was done.”

Ms. Norton said in a statement at the same meeting, “The Warren County Deputy Treasurer started working on ACH at the request of the IT department and their HP vendor,” in November 2024.

She said, “We had so much check fraud, it was costing us $25 per account every month. This was a way to have more secure payments, to save the county money and to get the vendors paid even more quickly…. Again, this was a breakdown in process. There’s definitely things that we should have done better, and I will take full accountability for that when the investigation is done.”

County Administrator John Taflan tells The Chronicle that Ms. Norton’s office, in its effort to transition to electronic bill payments, had posted notice to vendors on its web page with an online invitation to initiate ACH payments.

Mr. Taflan said it was through the new online mechanism that the fraudulent request arrived. He said that portal has since been removed.

Mr. Taflan said, when the County Department of Public Works received a real invoice from Peckham for approximately $2.1 million, DPW passed it on as usual to be paid by the Treasurer’s Office.

Mr. Taflan and Ms. Norton both confirmed that Deputy Treasurer Monica Stark used the new online information — not yet understood to be fraudulent — to make the payment electronically.

Both Mr. Taflan and Treasurer Norton said Arrow Bank, the County’s financial institution, reached out to confirm the payment. Mr. Taflan says it is protocol for any payment over $2 million.

The Deputy Treasurer confirmed the validity — incorrectly, it turns out — and the $2.1 million was transmitted.

Ms. Norton told the Board, “My deputy treasurer had been in place for four months. She was being trained by our 15-year tenured accountant, who is also very good.

“Supposedly there was a breakdown somewhere, but he literally told her, step by step, what she needed to do, side by side, exactly how to process the ACH.”

Mr. Taflan says the County learned of the error when Peckham contacted the DPW to say it had not received payment.

This was just after the Treasurer’s Office had sent a second payment for a second invoice of approximately $1.2 million to the same fraudulent account.

However, now alerted to the scam, the County contacted Arrow, which began efforts with the receiving bank to freeze the bogus account, confirm the fraud and, in the case of the $1.2 million, return the pilfered funds.

“It’s back in the county’s budget,” Sheriff LaFarr said.

Mr. Taflan said recovering the earlier fraudulent deposit of $2.1 million is more complex. He said the perpetrators had already begun to withdraw the funds through several ATMs withdrawals. He did not specify where, only that it was in a city, “not local.”

He said about $800,000 remains in the scam account, but that banks need to confirm that those monies are in fact from Warren County — not commingled with funds from other sources — before it can return cash left in the account.

Sheriff LaFarr told the County he is “cautiously optimistic” about solving the case.

“Very quickly, it was evident to us that this is not a sophisticated computer crime, not an elaborate form of phishing. This was a very basic act of fraud that was easily preventable.

“Our investigators have identified a person of interest,” he said.

“Crimes of this type typically have a very low success rate,” the Sheriff said. “It would be somewhat inappropriate for me to compare this to a simple crime against a senior (citizen), but it is very similar in nature.”

The Peckham letter

County Treasurer Norton said, “I welcome any audit, but I think it cannot involve the chairman of the board and/or the County Administrator.”

She said she believes they are targeting the Treasurer and downplaying the impact of the fact that the Peckham alert was not shared with her office.

Ms. Norton says she was told by Peckham’s credit manager that the company sent the July alert to all of their clients both by email and postal mail.

The County has confirmed that the Towns of Warrensburg and Queensbury and an engineer in the County’s DPW office in Warrensburg received such letters.

Ms. Norton said at the January 6 meeting that Town Supervisors on the County Board should have been aware of this issue, but “no one reached out to me.”

In a subsequent open letter to taxpayers, also provided to The Chronicle, Ms. Norton wrote, “Peckham’s fraud alert directed the county to take the following fraud preventative measures:

“Verify any request coming from Peckham to change banking details;

“Review internal security protocols related to Peckham;

“Watch for anomalies in Peckham communications to the county; and

“Educate your teams.”

Ms. Norton told the Board she and Deputy Treasurer Stark were in a meeting where Warrensburg Supervisor Kevin Geraghty, who chairs the County Board, said he saw this communication.

“That is simply not true,” Mr. Geraghty interjected, which led to a heated exchange between the two.

Ms. Norton later said, “It clearly looked, based on (communications), that the County Administrator and the County Chairman were squarely putting the focus on the treasurer’s office, no longer mentioning a fraud scheme that was perpetrated on the county, that the chairman of the board, the Board and DPW leadership had received communication via U.S. Postal Service, as well as emails (from Peckham), and that there was a breakdown in communication and controls throughout the process, and throughout the county, not just in the Treasurer’s department.”

Sheriff LaFarr said separately that he was first informed of the situation by Mr. Geraghty. “This matter was not reported to our Sheriff’s Office through the Treasurer’s Office, and that put us at a significant disadvantage. I didn’t receive a call from our County Treasurer. I didn’t receive a call from anybody in the Treasurer’s Office, not to ask a question, not to seek guidance.”

Again, Ms. Norton countered, in the meeting and her letter: “When the treasurer’s office found out about this fraud scheme on 12/23 we immediately looked into it. We called Arrow Bank.”

She said the bank told her “to follow a very specific protocol,” to contact the FBI, complete certain forms, and contact the State Police. We were not advised to call the Sheriff. We did not NOT contact the Sheriff.”

She wrote, “The County Administrator advised that he called the Sheriff advising of the situation within 2-3 hours of the Treasurer’s Office reporting the fraud to Arrow, the FBI and the NYS Police.”

According to a letter sent by the Warren County Board of Supervisors to New York State Comptroller Thomas DiNapoli, the exact total of the two ACH wire transfer payments Warren County made to the fraudulent account purporting to be Peckham Industries is $3,358,434.88.

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