Home General Puerto Rico Government Loses Millions Of Taxpayer Funds From Phishing Scam

Puerto Rico Government Loses Millions Of Taxpayer Funds From Phishing Scam

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Puerto Rico, A U.S. island that’s home to over three million Americans, accidentally sent $2.6 million to cyber-criminals in January after govt employees were tricked by a scam email claiming that someone had authorized changes to a government bank account.

According to the Associated Press, Ruben Rivera, the finance director of the government-owned Industrial Development Company, filed a police document Wednesday, alleging that the agency mistakenly initiated the transfer almost a month ago.

According to Info Security Magazine, “the email falsely claimed that the existing bank account used for remittance payments should no longer be utilized for this purpose and informed the agency that the money should be sent to a new bank account. It was this new account that turned out to be fake and in the control of cyber-criminals.”

The company informed the Associated Press that the FBI had been informed of the deceitful multi-million dollar payment as soon as officials found the mistake earlier this week. It’s currently uncertain what precisely the email mentioned, or who permitted the transaction.

“This is a dire situation, extremely serious,” said Manuel Laboy, the executive director of the agency and the governor’s chief economist, reports AP. “We want it to be investigated until the last consequences.”

“I cannot speculate about how these things might take place,” said Laboy, who assured the news agency that he takes the “big responsibility” of managing taxpayer money seriously.

Based on the New York Times, the money has been intended for Puerto Rico’s public pension fund, and the mistake was identified after a worker noticed that the funds meant for the retirement system hadn’t come. “We believe that the hacker might have breached the system throughout the retirement agency,” said Jose Ayala, director of the bank robbery division of Puerto Rico’s police force, reports the news agency.

The phishing scam has brought increased awareness of the territory’s public pensions system, whose unfunded liabilities contributed to the island declaring bankruptcy last year. Puerto Rico’s bankruptcy continues to be the largest government bankruptcy in U.S. history.

Earlier this week, the Times reported that the territory has “passed an important milestone” in re-negotiating the nation’s $129 billion in financial debt.

Puerto Rico made an agreement with creditors who hold $35 billion in its general obligation bonds, passing an important milestone as it tries to resolve its $129 billion debt crisis.

The contract, contained in a regulatory filing made Sunday evening by the territory’s federal oversight board, revises parts of the debt-adjustment plan it announced last year and makes peace with some of its most litigious creditors, potentially opening a shorter path out of bankruptcy.

Under the restructuring plan released in September, the board suggested paying the general obligation bondholders $11.8 billion, including $2 billion up front. Under the new agreement, the debt would be settled for $10.7 billion, with $3.8 billion up front.

However, the news organization notes that the agreement doesn’t touch Puerto Rico’s $50 billion public pension debt, the island’s most significant financial responsibility.

2 COMMENTS

  1. Puerto Rico complains about the lack of aid following the disasters they’ve had, but emergency supplies have been discovered stashed away in warehouses rather than being distributed. Now they’ve manages to give away millions of dollars to cyber criminals. It all looks like a strong argument in favor of those wanting to see more regulation by their government.

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