Council not out of pocket following €515k payment scam hit

Westmeath County Council has revealed that its insurance firm has compensated it for most of the money it lost when it fell victim to a payment scam in January.

The remainder of the loss is being shouldered by the contractor to which they had intended the January fund transfer to go.

As a result, the council is not out of pocket over the fraud, county CE Barry Kehoe told members of the county council at their July monthly meeting, held in Mullingar on Monday.

Reminding the members of what happened, he said that the fraud involved a payment of €515,000 to a single contractor in January of this year. “The matter was immediately reported to An Garda Siochana and that investigation is ongoing” he stated.

Mr Kehoe also revealed that an internal investigation was carried out within the council and revised procedures have been put in place to prevent a recurrence of such an incident.

“The council has been engaging with our insurers since the fraud was discovered and we have made a successful claim against our cybercrime insurance policy,” Mr Kehoe continued, going on to explain that the council had also engaged with the affected contractor and agreed “a modest burden share” on the basis that weaknesses had been identified in the contractor's systems as well as the council's.

“This means that the contractor must make arrangements to cover a proportion of the sum defrauded, either through the business that the contractor is operating or by making a claim against the business's insurers.”

Mr Kehoe said the contractor has now been paid the amount defrauded less the agreed burden share, and the council's insurer has covered the council's loss in full.

“So therefore there is no impact on council finances.”

He stated that as there is a garda investigation ongoing, he was not in a position to add any more details into the public domain at this time.