City of Chetek Recovers from $2.6 Million Wire Fraud Incident

In a noteworthy recovery operation, the City of Chetek, Wisconsin, successfully recaptured $2.6 million that was deceitfully siphoned off in a sophisticated wire fraud scam. The incident, which unfolded in November 2023, involved fraudsters who posed as contractors involved in the construction of the Chetek Wastewater Treatment Plant, providing falsified wire transfer instructions.

Upon discovering the fraudulent transaction, city officials acted swiftly, alerting local and state law enforcement and the FBI, and notifying all financial institutions involved. An extensive investigation ensued, affirming that the fraud did not result from a breach of the city’s computer systems. Instead, the scammers had created fraudulent email addresses that mimicked those of the city’s legitimate contractor, leading to the erroneous transfer of funds.

As a precaution and to prevent future incidents, Chetek has since enhanced its cybersecurity measures. These improvements include increased phishing awareness training for city employees to better recognize and respond to suspicious emails.

The city also secured a loan to ensure the uninterrupted progress of the wastewater treatment project and other city services during the recovery phase. Fortunately, by March 2024, the city confirmed the full recovery of the funds, which also allowed for the repayment of the emergency loan.

This event underscores the increasing need for vigilance and robust security measures in municipal operations, especially concerning high-stake transactions. Chetek’s experience serves as a cautionary tale and a testament to the resilience and prompt action of its administration in safeguarding public funds.