County recovers $128K after scam

Madison County has recovered over $120,000 in millions they were scammed out of recently in road construction payments. 

Sheriff Randy Tucker told the Board of Supervisors this week that another almost $2.1 million has been located and is in the process of being recovered. 

“We are currently in the process of waiting on federal authorities to discover and issue subpoenas to additional financial institutions across the country,” Tucker said on Monday. 

Tucker said about $128,000 has been recovered from one institution and they are currently working on recovering $1.58 million and about $500,000 from other institutions. 

“At this point, we’re looking at the possible recovery of $2.2 million at this point and hopes of recovering the balance,” he said. 

The Sheriff added that the investigation was ongoing but it has so far yielded no criminal intent on behalf of any Madison County employees. 

Supervisors announced last week that the county comptroller fell victim to a sophisticated social engineering scam that resulted in over $2.7 million of State Aid bond monies allocated for Reunion Parkway to be sent to a fraudster. 

The board was first alerted to the scheme on March 19, when it was discovered that $2,741,243.69 was paid to someone claiming to be the president of Hemphill Construction. 

Comptroller Na’Son White sent electronic ACH payments to someone claiming to be Jay Hemphill, the CEO of Hemphill Construction Co., the contractor currently working on the Reunion Parkway project, according to the Sheriff’s Office incident report. 

White sent three payments beginning on Feb. 20, 2024, for $128,989.97. A second payment of $1,073,870.66 was made on March 5, and a final payment of $1,538,383.06 was made on March 12.

According to the incident report, the county purchasing clerk received an initial email which was later forwarded to County Administrator Greg Higginbotham before being forwarded to White.

The email requested a change in the bank account for payment. 

The payments were initially cent to a Citizens Bank N.A. account.

On March 11, one of the payments was returned, and White called the fraudster and was given a Bank of America bank account. 

“All invoices that the county received from Hemphill Construction Company were true, legitimate invoices sent from the actual company building the parkway phases,” the incident report says. “The only difference she could find in the emails that the invoices came from was a ‘.com’ email address was used, whereas a ‘.us’ was used for the ACH payment form.”

Tucker said on Monday that criminals are “getting smarter and smarter,” and the social engineering scheme likely occurred by the fraudsters sifting through public records such as claims dockets and contract awards that are all available on the county’s website. 

Madison County Chancery Clerk Ronny Lott and Higginbotham outlined a couple of short-term and long-term checks and balances they would like to implement to ensure something like this doesn’t happen again in the future. 

For the short term, Higginbotham said they have placed a moratorium on all ACH payments and vendors will be paid with paper checks. In addition, the ACH bank form has been taken off the county’s website and any vendor electing to change a bank account will have to contact the county in the future to receive a copy. 

As far as long-term solutions, Higginbotham and Lott suggested the county hire an internal auditor that falls under the Chancery Clerk’s Office to ensure processes across county departments are sufficient and processes are followed. 

“This is another way to get an extra set of eyes on the county’s financial transactions,” Higginbotham said. 

The county administrator said the state requires this for state agencies and the county’s budget alone is larger than a “significant number of state agencies.”

Another long-term solution proposed will be the addition of tech-based solutions such as ongoing cybersecurity training for employees regarding everything from safeguarding phishing attempts to social engineering. 

Board President Gerald Steen asked that the long-term solutions be brought back before the board to discuss viability and implementation.