FBI agents and federal prosecutors have recovered more than $1.5 million that was stolen from Appalachian State University in a billing scam, the U.S. District Attorney’s Office for the Western District of North Carolina announced Thursday.
The suspects in the case, who have not been identified publicly, stole nearly $2 million from the Boone university by posing as a construction company that was doing work on a new building on the school’s campus. The fraudsters convinced the Appalachian State staff to transfer the money and then used wire transfers to launder it through multiple other bank accounts.
The culprits had spread the across six accounts under several different corporate names, according to a civil complaint filed in the case. Federal authorities seized more than $960,000 was seized from a JP Morgan account in the name of Royce Hub Trading, and more than $450,000 from a Bank of America account in the name of Mornay Logan DBA Holding Properties. Another $39,000 was in a Bank of America account under the name UAV Research and Development and $81,000 was in a Woori Bank account under the name Neo Tech and Design.
Megan Hayes, director of University Communications at Appalachian State, praised the U.S. Attorney’s Office and the FBI for their efforts in an email to CPP.
“We are very appreciative of the work by the U.S. Attorney’s Office and Federal Bureau of Investigation to seize and recover the university’s funds,” Hayes said. “In addition to implementing more stringent policies to increase vigilance in the face of rising rates of cyber crime, we will continue our efforts to recover the remainder of the lost funds.”
Federal officials said the university discovered the fraud and notified the FBI. Investigators located more than $1.5 million in multiple accounts and obtained forfeiture seizure warrants to prevent the thieves from accessing the money. Federal prosecutors then filed a civil forfeiture case and the Department of Justice approved the transfer of the recovered money back to Appalachian State.
The civil complaint said the thieves posed as an employee of Rodgers Builders, a Charlotte-based construction firm that was doing work at Appalachian State, and asked university staff to change the account where payments from the university to the company were deposited. The fraudsters used an email address nearly identical to one used by Rodgers Builders employees and posed as the company’s controller in email exchanges with the university’s staff.
The university discovered the fraud when an employee of Rodgers Builders contacted the university to ask about a payment that hadn’t been made.
A spokeswoman for U.S. District Attorney R. Andrew Murray said she couldn’t comment on the existence of a criminal investigation into the suspects in the case.
Murray touted the success of the civil forfeiture proceedings.
“Today’s announcement is an example of the results we get when we use civil forfeiture laws to swiftly stop crime and provide financial relief to victims of fraud,” Murray said.
“In this case, the FBI located and seized the stolen funds even before criminal investigative targets had been identified or a criminal case had been filed. Under these circumstances, civil forfeiture is the only area of law that enables law enforcement to swiftly obtain warrants to secure stolen funds, and to prevent the perpetrators of fraud from accessing them. Identifying and seizing ill-gotten gains and returning forfeited funds to victims is a priority for my office. I will use all of the tools at my disposal to make victims whole, and civil asset forfeiture is an invaluable tool in that arsenal.”