SMMUSD Discovers Fraudulent Transaction Of Almost $3 Million

SANTA MONICA, CA — The Santa Monica School District announced Wednesday that authorities are investigating a fraudulent transaction for the amount of $2,933,511.64 that was discovered in late August.

District officials said they discovered the "carefully orchestrated online hack" regarding a regular Electronic Funds Transfer to a current construction contractor on Aug. 28. According to the district, it appears that a hacked email account was used to carry out the fraud.

An SMMUSD email account was not the source of the hack, according to the district's technology department.

“The District has not made a prior public comment regarding this incident to avoid interfering with ongoing investigations and the recovery of the monetary shortfall,” said Melody Canady, Assistant Superintendent of Fiscal Services. “While the investigations have not concluded and efforts are still underway to recover the shortfall, given the duration of time since the incident the District believes it appropriate to share the details of this incident with the community.”

The district — as well as the Los Angeles County Office of Education, Santa Monica Police Department and the Federal Bureau of Investigation — worked quickly and were able to recover $2,733,305.38.

SMMUSD and law enforcement are still actively pursuing the remaining $200,206.26, officials said. District officials have contacted the company whose email appeared to be the source of the hack to demand it repay the remainder.

“The fiscal, purchasing and facility improvement departments have completed a review of procedures,” said Canady. “Extensive safeguards have been implemented to prevent this type of incident from occurring in the future. We appreciate the quick efforts of our staff and all law enforcement officials involved who supported this outcome.”