Hilliard Police, External Auditors Delve Into Fleecing of City's Finance Department
by Kevin Corvo
A criminal investigation is underway into the reported theft of nearly $219,000 from the City of Hilliard. The Hilliard Division of Police is actively investigating the incident that originated from an email phishing incident in December which resulted in Hilliard City Manager Michelle Crandall placing the city’s finance director and an accounting assistant on paid administrative leave Feb. 6, pending the investigation.
Crandall did not become aware of the incident until Jan. 31 when then Finance Director David Delande informed her, although Delande reported the theft to Hilliard police about three weeks earlier, according to David Ball, director of public relations for Hilliard. On Feb. 13, the finance director’s employment with the city was terminated, according to Ball.
The city is “committed to full transparency,” Hilliard City Council President Omar Tarazi said Feb. 13 where council members briefly discussed the incident. Crandall told council members the administration had no additional comments other than what had been previously communicated to council members during an executive session, or closed meeting, and in a subsequent press release.
An external auditor is taking a “deep dive” into the incident, according to Tarazi. The city’s announcement of the incident “isn’t the end,” he said. Crandall said the investigation is ongoing. “Through the city’s internal and criminal investigations, we are learning exactly what happened and when, and we are committed to finding the criminals who launched this phishing scam,” Crandall said.
“Our investigations have shown the loss of funds was a result of a human error in not following established protocol (and) did not involve any breach of the city’s network, systems or data,”
The city is performing a “thorough review” of the finance department’s accounts payable protocols to determine why a required protocol that could have prevented the theft was not adhered to, Crandall said.
A preliminary timeline emerges
On Dec. 8 and Dec. 19, an accounting assistant in the city’s finance department received emails from an individual posing as an existing vendor of the city, Strawser Paving Company, according to Ball.
The Dec. 19 email persuaded the city staff member to change the bank-account routing information for the company and on Dec. 20, a payment of $218,992 was issued to that account. While taking such action is standard procedure for an accounting assistant, in this instance, a verification protocol the city has in place was not followed.
Between Dec. 28 and Jan. 5, staff discovered the incident, again according to Ball.
The city’s finance director reported it to Hilliard police Jan. 6 and an investigation was launched.
On Jan. 31, the finance director informed Crandall of the theft.
On Feb. 1, a claim was filed with the city’s insurance broker to recoup the missing money and the city’s director of human resources began an internal investigation, Ball said.
The incident is the subject of an ongoing investigation.