Madison County was scammed out of $2.7 million recently. Madison County Board of Supervisors President Gerald Steen announced the fraud after an emergency meeting of the Board was held in executive session this morning.
Mr. Steen said $2.7 was transferred to what was thought to be a current vendor. However, the funds went somewhere else. Madison County officials learned of the fraud on March 19 and immediately notified law enforcement, including state and federal authorities. Mr. Steen said "additional safety measures have been put in place."
Sheriff Randy Tucker said he is "confident the county can recover some of those funds."
No action was taken in executive session this morning.
Kingfish note: Uh-huh. That was the press release, now for the story.
A person purporting to be Jay Hemphill of Hemphill Construction Company emailed the purchasing clerk for Madison County. The clerk forwarded the email to County Comptroller Na'Son White. The county has a contract with Hemphill Construction to build Reunion Parkway Phase III. However, Jay Hemphill has been deceased for over 30 years and no Hemphill has been at the company in over 40 years.
The email stated what was owed and directed the county to send payments to a different bank account. The email contained multiple misspellings. The comptroller called to confirm and spoke to a man with a thick Middle-Eastern accent in Germany. (Yes, your reading comprehension is working just fine.).
"Jay" sent legitimate Hemphill invoices and used an email address that used a ".com" address instead of ".us."
The county sent the following payments:
2-21-24: $128,990
3-13-24: $1,073,870
3-15-24: $1,538,383
Total: $2,741,244
White tried to send another payment to "Jay" on March 11 but Renasant Bank returned the payment. She notified "Jay" of the return. "Jay" sent her new payment instructions. White graciously sent the March 15 payment ($1,583,383).
The scam was detected when Hemphill Construction called ton enquire about its payment. One can imagine what took place on the phone. The County Comptroller claims she paid Hemphill. Hemphill says no, you never paid us. The fraud was discovered but not before Madison County lost $2.7 million.
The Attorney General, State Auditor, FBI, and Secret Service are assisting with the investigation.
The Board did not fire the comptroller nor the purchasing clerk today.
Insurance will probably not cover the fraud.
114 comments:
The county just spent $2.7 million to train the comptroller about phishing and IT security.
Shad White, meet the big fish that got away. Good job nailing granny on that missing $27, though!
No new luxury SUVs for the BoS this year.
Sorry 1110 - this does not fall into your favorite polls lap. No city, county or state employee ascended with this money. Yes, a county employee was stupid - but that's a different matter.
Maybe you need to learn a little more about the job and its authorities before you take another toke off your 'med'mj.
Ain't a fan of White, but this continuous line about his going after the little fish doesn't work. His job is to catch ALL the fish, little and big, and to go to wherever tips lead the office.
I work in cybersecurity and this is a common scam. It frequently involves a hacked Microsoft 365 account without Multi-factor Authentication. Honestly, any organization not using MFA and not training their employees on basic cybersecurity should be held criminally liable for negligence.
Cyber Coverage would have covered some of this. Do not ever fall for the new bank account information without calling your business not the number they gave you. Do you need cyber coverage? Give me a call!
Two words - immutable backups. Because you can talk until you're blue in the face about unsolicited email messages wanting passwords and social engineering and it goes in one ear and out the other.
PS; next time have them come in and pick up a check.
@11:17 then why doesn’t he follow the tip provided by KF and CJ about the former Chief of Police in Pearl who had a no-show job with Rankin County while he was chief?
Shad will never go an look into the corruption in Rankin Co. 11:10 is correct, little fish with no political power.
How do some people get these jobs! What a dummy.
Muhammad- “county of Madison I call u about your extended auto warranty coverage had expired. Please send 2.7 million right now for payment in Germany.”
Comptroller “ bless your heart for letting us know. Here ya go sweetie”
First off, they should not have a system where someone can make a phone call and get millions of dollars.
Government at work. Supervisors that are not competent to run a lemonade stand hire an incompetent comptroller because she is very close with Supervisor Paul Griffin. Then she falls for this scheme. Now, government will spend $2.0 million worth of resources (Secret Service, auditor, FBI, Attorney General's office, etc.) so that they can recover $1.5 million.
The cheapest and most efficient way to handle this is to hire someone competent from the beginning. Then it wouldn't have happened.
Are you sure this is Madison, THE Madison County - the land of milk and honey where no wrong can be done - the place where all the citizens are beautiful and wholesome and above moral reproach???
Rumor has it the “controls” they will put in place includes hiring someone to do the comptrollers job for them since they apparently can’t handle it. And they will keep the position. Not the first time there has been a problem in that office. But of course when you are a certain supervisor’s girlfriend you get away with anything. He tried to shift the blame from her but it didn’t work.
I live in the city of Madison. Is there any way we can break of and no longer be part of this crooked county? P.S. the county can keep Ridgeland.
Most likely the scammer has hacked either an email the county or at the legitimate contractor. They then knew that the contractor was owed money by looking at the emails and probably approximately how much. This gave them an air of legitimacy when they called. Had this happen to a private business I audited, they had hacked the vendor's email so they created invoices for the same thing with a different payment instruction and apologized for the error on the original email. Cost company about 750k and didn't know any different till the real company called asking why they hadn't gotten paid.
So let’s see. Bank account number has changed. Person on phone is in Germany with a middle eastern accent. 2.7 million at stake. You don’t think to ask for advice or help. You don’t call the original number for said vendor. This ain’t 50 bucks on the line. So this person should be fired. The person that hired them should be fired. The county administrator should be fired.
And I thought that county on the Mississippi River in the Delta was bad! Their BOS can't hold a candle compared to these idiots with their feather lined pockets.
wire fraud. for some reason its an easy scam. but sooooo easy to avoid it with some common sense controls. Which means gumment will get nailed every time. Its why the IRS doesn't do e-mail
It would have been so simple to just call Richard Rula and ask him if it was legit. He would have told you it was a scam. Hemphill is in Florence, not Germany.
The longer I live in Madison and Madison county the more I realize they are both a lot like a used car lot run by a Danny DeVito character. The salesman is a slick, fast talker and the cars are all shiny but you might want to look under the hood before you buy.
I work in IT for the state. Someone from the financial staff forwarded an invoice for 3,000.00 that they didn't recognize. Sure enough, this was social engineering at it's finest. The invoice wasn't paid and determined bogus.
So I suppose the state has more competent people than the by-god, do-no-wrong county of Madison.
Stuff happens. The question is, what happens now.
I think any reasonable organization would probably fire the comptroller.
Hey, it's just mad money -- someone else's. The taxpayer can always cough up more.
Got an email that came from our worship pastor that said I need to change my bank account info for my paycheck. First of all it came to our general info@ email but I called worship pastor and asked him and he said I didn't sent it. So I junk emailed it. The person should be fired who gave away the 2.7 million. What an idiot.
11:17 AM, by your own rubric, is Brett Favre a city, county or state employee? Lil Shad has no problem going after him!
“A person purporting to be the President of a local contractor emails the purchasing clerk who forwards the comptroller.“
MCJ article has the invoice/email forwarded from purchasing clerk, to county administrator, to comptroller. So, three different folks fell for this scam. You’d think at least one of them would have caught it.
Nepotism and ignorance.
How does the system even allow sending millions without ANY sort of verification?
IDIOTS
Maybe the employees of Madison County should take a refresher course from the comptroller's office in Jackson. Better yet, now that David Archie is out of a job, perhaps he can provide the training.
So, uhh, what's the phone number to the comptroller? Asking for a friend.
Bunch of idiots...
If the Madison county supervisors, or any governmental entity, wants a competent employee, and they elect to pay commensurate wages a competent employee would make in the private sector, then everyone goes crazy and says the wages are excessive. While nepotism might be a factor in this specific instance, the overall problem in local governments in Mississippi is public expectations to not offer competitive wages for professionals. Well, you often get what you pay for.
@11:45 AM - How do they get these jobs? It's called a casting couch. Ask Paul. He's an expert in that department. It's the same way that Kamala Harris became DA of San Francisco, then AG of California, then...
11:45 - you are obviously under the false impression that if it isn't reported on this website then it it isn't happening.
Is this the same girl who, last year, was found to be not only purchasing, but issuing gift cards as well as accounting for their issuance? Asking for Rudy's lawyer.
Mike Espy, usually anxious to run his mouth, is awfully quiet.
And it's a fact that Griffin's daughter in law is next in line to be Human Resources Director while Banks' daughter in law is next up for Director of Planning and Zoning.
Not even Mary Hawkins meddling can straighten out this corruption pit.
Incompetence on steroids-
Maybe a Nigerian prince will offer to make things right and send Madison Co. $2.7 million. It could happen.
Lot less than lost to a prior County Engineer
Madison County can sell off The Paul Griffin 12+ million dollar park on the corner of HWY17 & Sulfur Springs Road to pay for this err in judgment since he and his colleagues refuse to do what they should. Banks terminate people for way yonder less 2.7 million.
In time, someone will get crucified and it wont be who was ultimately responsible for having the funds transferred.
Everyone is missing the fact that all these employees mentioned would not be in these jobs if Gerald Steen wasn’t a supervisor and voting with the Democrat supervisors.
This is how the decline starts. Incompetent employees get hired. Incompetent results ensue. Taxpayers foot the bill for the incompetence. Next thing you know, you can't afford to hire certified water operators or folks who can even maintain pothole repair machines. And, then deferred maintenance has finally caught up and big infrastructure projects like road repairs or water line repairs are needed but cannot be afforded.
"Maybe the employees of Madison County should take a refresher course from the comptroller's office in Jackson. Better yet, now that David Archie is out of a job, perhaps he can provide the training."
Sounds like a number of them also need to take lie detector teat .
What a complete and total dumbass.
How are these people even employable in office jobs?
Anybody with a jr. high school degree could have sensed that this did not pass the smell test. This would not have happened without county employees being complicit. Now, look into it and send them to our beautiful state prisons.
Just have to know, Did the real Hemphill ever get paid?
If you hire only family and friends, what could possibly go wrong?
Sounds like she put an awful lot of effort into "falling" for this. Get her, Shad. This stinks.
No one is this dumb this has to be an inside job.
How the hell was one person allowed to cut a $2.7mil check without checks and balances? Aren’t these things brought up at board meetings to vote on to be paid? They request the boards approval to pay invoices as a way to circumvent situations such as these. Complete incompetence.
11:45 - can you say that the auditor is not looking into the issue raised by 11:10, the Pearl Police Chief? Last time I checked, they generally don't talk about an audit or investigation until it is complete ---- that is, except for the TANF deal where the auditor decided to write a book about it while the investigation is still ongoing and the prosecution is underway, but I digress.
And 1:01, the auditor did demand payment back from Farve; just as he could this German guy that answered the phone when the comptroller called, if he could figure out who/what he is. According to what you consider to be your only source of information about what the auditor is doing being JJ, then maybe you could read the last sentence or two of the report - that several folks are investigating and trying to determine who received this money.
That's different than the comment made earlier about Auditor going after the $27 clerk and comparing it to this employee. Farve = German. Not Farve = comptroller. Got it?
Who is Na’Shon and how did she get the job she obviously was not qualified for?
I bring before the board motion to pay Abdul Von Talibanistein for Hemphill services. Motion approved, send payment.
Next item
KF, this was a contract job. The purchase clerk had no involvement. The error falls on the county admin office staff, more then likely the accounts payable clerk and the comptroller.
@3:39 PM: Counties can legally pay only amounts approved by the BOS on a claims docket. If Supervisors are allowing unapproved claims then the Auditor should be on the Supervisors'asses, including their bonding companies.
When I worked in state government we had protocols for establishing, in person, payment processes and accounts/addresses at the time of contract award, before any payments were made. No one could get that changed without official action by the authorized rep. of the payee, who was also pre-established. Multiple checks on that info. You couldn't just send in an invoice with an address or account # and get paid unless it agreed with what was already on file.
Did they move the city limit lines from Jackson into Madison County? jackmadison.
Madison County is going to have to raise taxes to pay for this 2.7-million-dollar mistake.
Please, please, please remember this next time elections roll around.
@12:26 you neglected to mention that Hemphill is domiciled in Florence, MISSISSIPPI, not Florence, ITALY. Perhaps this "minor" omission is why the geniuses that issued these payments were confused.
Is Gerald Steen beatable?
Am I incorrect in thinking that the BOS has to approve a claims docket? It can't be this simple to become a fraud victim. Enlighten me KF.
5:26, the BOS certainly approved the Hemphill invoices. But they don’t review payee addresses or wire instructions. They just approve the invoices. The invoices were legit. The new payment instructions were not.
Getting any of this $$ back is a pipe dream! It was likely carved up into any number of pieces within minutes and bounced through numerous bank accounts all over the world. The taxpayers got robbed and someone should be held accountable.
Gosh This is getting up there with Hinds County kind of business.
Bruh, can you just Venmo me that $2.7M you owe me? Why was there not peer review in place for payments this large? BTW, this isn’t the county’s money. This is the taxpayers money sent off into nowhere. Now we all get to pay for this.
Same thing has probably been going on for years in City of Jackson- COJ to incompetent to even realize what is happening.
aww heck, No worries folks. The board made a Budget amendment before ending the special meeting. Do we assume Taxpayers on the hook now for $ moved over from a fund to pay for this sh** show disaster?
Get ready, it's going to get worse.
Steen is going to talk his bs and most will believe it. It is really pathetic watching Banks and Griffin yank Steen around to have their way.
Or vice versa.
You pick.
Aren't there some emails?
Make them public.
Hmmm......Similar things happened when a certain current Madison county employee worked at veteran affairs in the accounting division. Must be nice to be so unaccountable
When, where, and how are these positions advertised or posted for candidates. Are there any job requirements or a job description or does one have to be “in a relationship” with Griffin, Banks, or Steen? Jobs like these require education, experience, and qualified candidates! In the real world phishing efforts like these are drilled into employees ad nauseum! As a 30 year taxpayer of Madison County, this sickens me! Some employee who likely didn’t understand basics of governmental accounting or cybersecurity was in over their head and literally cost hardworking tax payers millions! The entire department needs to be replaced for dereliction of duty!! It begs a question, “What else has been fraudulently invoiced and paid by Madison County?” Let the sun shine in and let’s figure this out, going after those who are responsible whether employees of the county, employees of the vendor, or girlfriends of a supervisor without regard to race, gender, or sexual orientation, etc!! Let’s take our county back!! THIS IS PATENTLY UNACCEPTABLE!!
Well it cost $2 million. But, it’s high time the State Auditor, Attorney General, FBI and Secret Service came to visit the Madison County Board of Supervisors.
Y’all enjoy that investigation. You deserve every minute of it.
I guess Gerald Steen, Karl Banks, Paul Griffin will vote to take a pay cut to help pay back the 2.7 million dollars.
I've heard this this woman is an Army Reserve Lieutenant Colonel and is a CPA. I believe she was working for the Copiah County School Srsystem before coming to Madison County.
It is early in the supervisors term. We got them for another 4 years. I hope every Madison County voter remembers this shit when election time comes around.
Anyone with any questions about the competency and professionalism of the Madison County Board of Supervisors need only go in person to one meeting to watch the clown show.
Bill Dees - true, but!!!! Carry this thing through, don't take the short cuts.
The Board of Supervisors approved paying these invoices - to Hemphill Construction. Hemphill submitted invoices, they were put on the claims docket, the BOS approved the docket.
Nothing wrong so far; BOS did its job, the process was followed.
It was after all this that the stupidity, or the scam, whichever it is - occurred. The problem here was how the claim, approved by the BOS for payment, was handled by the staff that redirected the bank account into which the money was transferred.
The Madison Co. population is approximately 110,000. $2.7 million is only $24.50 per resident. That is the cost of one prime rib-eye steak at The Fresh Market.
Alternatively, Paul and his squeeze-comptroller should forfeit their incomes and retirement forever.
KF scooped WAPT with this story. Good job.
Madison gives away almost $3 million, while Rankin Sheriff is about to bankrupt the county with lawsuits, Madison it ain’t that bad !
The County Administrator was once the Comptroller but resigned shortly after starting the job!!!
Hire stupid people, get stupid results
Madison's $2.7 million looks much better than Rankin's $400 million (Goon Squad law suit).
She could be my mom, wife, girlfriend , side chick or whatever , she fired yesterday !
Had this happen to a customer once. Changed phone number on the invoice by one digit. Set up that phone number so they answered when someone called. Created a website one letter off from ours. Hassled customer for 3 weeks before getting payment. Money transferred among several accounts before buying crypto and disappearing for good. It’s worth the hassle for a huge payday…and it’s as simple as sending out a few thousand phishing emails. Always wondered if it could be an inside job…. FBI said after 24 hours it’s probably impossible to recover any funds.
Cyber insurance only pays if you follow what processes and procedures you must put in place to adhere to the insurance policy. Most make you do cyber training and phishing campaigns. Figure out your most vulnerable employees and train them more. If you have not implemented these type of services then your security rider is useless.
Gerald it might be time to leave the dark side. Come clean and start doing what is in the best interest of your constituents!! You have lost my vote and will work to insure you lose more votes!!
These folks making snide comments about the administrator’s time at MSVA are nothing but sour grapes. Personally, I enjoy seeing everyone Stacey Pickering tried to use and abuse and fail to corrupt on to better things making more money and having more honest respectability than Pickering has ever earned or achieved.
Sounds like the state legislature needs to take over the accounts payable office in Madison.
Is Ted H. busy on Saturdays and Sundays?
Tucker says they should recover some of the money. Yea right. That money is gone!
Another interesting fact. The county didn’t just send one wire transfer. They did it 3 times for a total of $2.7 million. I smell a nest of dead rats!
Ain't computers and technology a wonderful thing?
Since the board did not terminate the comptroller's employment she should do the right thing and resign.
She probably will not since the board is behind her but she should.
Hinds County Board of Supervisors continues to be thankful for the Madison BOS.
11:18 is right; I have similar legal expertise. Technology is the first and essential line of defense against this scam. We have already exceeded the employee training saturation point.
Someone should do an analysis of all available insurance coverages which might be available to / for benefit of employees of the city.
When Lane stole money from the HOAs several HOAs had a “crime policy” in place which reimbursed the HOA for Lanes theft.
Worth looking into imo
March 25, 2024 at 11:13 PM
Steen's constituency needs to find a viable candidate to run against him ASAP! This isn't the sort of thing you can decide on last minute - solid candidates are several years in the works!
Kenny Wayne Jones becomes the administrator for Hinds County amid allegations of incompetence.
Madison County says “Hold my beer.”
But in the long run, they'll all be put right back in by the citizens.
@7:42 a.m.
How do you know this? I have heard the exact opposite regarding insurance coverage for the Ridgeway Lane losses. Which subdivisions have you heard had coverage?
Plenty of corruption here in North Mississippi. Some is quite in your face. It is like the 1980s all over again. Here we would say Shad appears to be a "Respector of Persons".
Another caution: I once had my mortgage bought from my mortgage company by another mortgage company, who proceeded to send me a bill for my payment. I'd never heard of these guys and refused to pay until my original company confirmed the sale. Anybody can send you a letter and a bill claiming anything.
Quite an assumption on Kingfish's part that insurance will not cover this.
These things happen. I don't think it's fair to call it incompetence. Easy to say when you weren't the ones affected. How is a clerk or comptroller supposed to know the current owner of a vendor when they pay by vendor name? Blame the ones who perpetuated the crime.
@2:37PM Maybe because the real vendor has been dead for 40 years?
You can't hang this one on Steen. It all occurred on a Wednesday night and Steen is always in a Baptist church prayer meeting on those evenings.
If you are involved in a fraud, ins wont cover. If you are the victim of a fraud ins will usually cover.
2:37 - "How is a clerk or comptroller supposed to know the current owner of a vendor when they pay by name"...
By ASKING FUCKING QUESTIONS about the validity of the invoice, the policy on paying large amounts... ANYTHING to get another set of eyes on 2.7 million dollars leaving the coffers. By taking the extra time to possibly avoid the crime in the first place and by exercising some personal accountability.
OH right. That doesn't exist anymore.
@2:37 These things happen?!? Really?!! This should have never happened and could have certainly been avoided with some very quick & simple verification steps. This was incompetence at its finest!!! And the board should be embarrassed by the fact that the comptroller is still employed by them!!!
You all let Kay Pace steal your money for decades and said nothing. No reports on how poorly her office was ran, I wonder why?
You all elected her incompetence!
So the Madison County Comptroller can authorize payments in excess of over $1 million without any additional approval or review? Internal controls need improvement.
It’s not really a lot of money.
It's truly shocking that this amount of money and transaction was not required to be done in person, with several bank officers verifying everything. Sheesh, in a normal day - banks take hours, days, or weeks just to push a mortgage through with a customer they fully know. How on earth does a city employee have this much "clearance" to even have access to such a transaction?
@2:37 - former controller here. It's a common scam and something similar would have happened to me multiple times but I caught on pretty quickly. The emails are usually poorly written by someone using a translator app or a non-native English speaker, and the bank account details don't match the vendor name or are for a nonlocal or even foreign bank account. All it takes is picking up the phone to confirm with your usual contact the change in the bank account details. If someone else answers the phone, start asking questions. I find it hard to believe that payments that large have been made without prior communication with someone in the vendor's office.
Best practice is to require two people to authorize wire payments, but even that is worthless if one of them doesn't take the time to verify invoices and wire instructions.
@8:05 AM - That you, Shelton?
@March 27 2:37 Lol! That can’t be Shelton, he misspelled comptroller. Haha!
I remember years ago when a tornado hit Canton. Canton had been paying premiums for a policy sold to the city by one of the city employees. It turned out he was pocketing the premiums and there was no coverage. Why he did not go to jail, I don’t know.
You three democratic supervisors, take the money out of your freezer and return the stolen money. Madison County your constituents are watching y’all closely! Steen going to six churches for votes is not going to keep you out of hell.
So. As a Madison County employee, why should we EVER worry about being terminated for anything??? Paul Griffin’s girlfriend ousted 2.7 mil and nothing happened to her!
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