by Ivan Foley
The county auditor’s review of the treasurer’s office and the recent $48,200 wire transfer to an email scammer has resulted in two recommendations.
Beverlee Roper, first district commissioner, had a suggestion for another recommendation the county auditor could make.
“The auditor’s recommendation should include: ‘the treasurer shall not lie,’” Roper said.
Roper made the comment during a meeting of county commissioners Monday morning to hear the result of the review of the office of Platte County Treasurer Rob Willard by Kevin Robinson, county auditor.
Roper’s comment came during discussion of the series of events that preceded the treasurer sending the $48,200 transfer from the county’s UMB account on the Friday afternoon before the three day Memorial Day weekend.
Robinson’s review shows that prior to sending the transfer as requested, UMB officials had questioned Willard about the validity of the request after Willard told them the request had been made by email.
A portion of Robinson’s report indicates that the treasurer told UMB officials “that the presiding commissioner had made the request and the wire was for paying consultant fees, and that he had verified the request for payment with the commissioner.”
Upon hearing this in the report on Monday, Schieber reacted immediately by saying: “Which I don’t have the authority to do in the first place and which is untrue in the second place.”
Robinson said: “That’s the information the bank was working on.”
Roper added her comment that the auditor’s recommendation should include that “the treasurer shall not lie.”
Willard was operating off of information sent to him by an email scammer who had spoofed the email account of Schieber on that Friday. Platte County was one of seven counties in Missouri who reported the email scam that day--but Platte County was the only one to fall victim to it.
“Maybe Rob (Willard) considers the spoof email as verification. I never talked to him until 6 p.m. that night,” Schieber reiterated on Monday.
Reached for comment on the commission’s reaction to this portion of the report, Willard told The Landmark:
“I wasn’t lying. I was mistaken in believing first that it was Commissioner Schieber sending the email. I was mistaken that it was a valid request. A mistake is one thing, a lie is another.”
While the email communications between the scammer and Willard were underway on May 27, Schieber was out of town. He said he was on a lake in South Dakota. His cell phone was on the shore.
Willard had sent a text to Schieber’s phone at 2:36 that afternoon saying: “Could you call at office or on my cell phone? Not sure what the payment for a consultant is for.”
Willard never heard back from Schieber but continued the process of authorizing the wire transfer, which was eventually sent to an account under the name of Shmonah Trust with an address in Tamarac, Florida.
When Schieber did get access to his cell phone and found text messages from Willard, he told Willard he had no idea what he was talking about, that he had sent no emails.
Willard then notified UMB. The fraud departments of UMB and Wells Fargo Bank--the bank account to which the scammer had requested the transfer--became involved. A little more than a week later, presumably through the work of the banks’ fraud departments, around $28,000 of the $48,200 had been returned to the county’s general fund.
At Monday’s meeting, Schieber pointed out: “Had Rob been able to get a hold of me, and I said ‘yes, Rob, this is a legitimate expense,’ he still shouldn’t have done it. I don’t have the authority to do that. Everybody in this county knows it takes more than one commissioner to authorize a payment.”
Willard admitted he did not follow the county’s procedures and processes in authorizing the $48,200 payment on that day.
“That was a mistake on my part. I thought because of the time-sensitive nature of the transaction from what I thought was the commissioner, that’s why I took the actions I did. That was clearly a mistake,” Willard said last week.
The bill payment process, under county policy, involves the authorization by at least two commissioners. The payment request is then routed to the county auditor’s office to verify funds are available in the particular account.
None of that was done on the Friday of the scam.
According to the review done by the county auditor, UMB’s electronic fund transfer process requires two authorized representatives to initiate a transfer. On May 27, the treasurer initiated the wire transfer by calling UMB, initially utilizing the “token wire” process. The necessary information was collected by UMB and as required by the bank’s procedure, the department called back to obtain the second authorization. It was at this time that the treasurer learned that the second person in the office was not authorized to initiate a wire transfer (his top deputy was out of the office that day). UMB switched the request from a token wire to a no-token wire request which requires a commercial loan officer to verify the request and to call the organization to obtain a six digit code given to the requester by the wire department.
The UMB commercial loan officer called Willard to obtain the digital code. At this time, the validity of the wire was questioned when it was stated that it was an email request. “The treasurer responded that the presiding commissioner had made the request and the wire was for paying for consultant fees, and that he had verified the request for payment with the commissioner. Upon validation of the digital code, the wire received the second authorization by the bank.”
Robinson’s report indicates the bank followed its internal controls and procedures. “The bank verified authenticity and credentials of the person making the request for a wire transfer and confirmed the necessary code information known only by the county. The bank deviated from the phone online procedure by initiating a same day wire after the bank’s published 2 p.m. deadline for origination,” Robinson says.
“The Platte County treasurer and the chief deputy treasurer, as the two authorized representatives, routinely make electronic transfers and payments using the “token” process. On May 27, the chief deputy was out of town, which required the authorization to follow the no-token wire process,” Robinson’s report says.
Robinson said the only other time he had seen the treasurer’s office employ the “no-token” wire process was on Dec. 1, 2015 for a wire payment for the Shiloh Springs management contract. The December no-token payment had a supporting contract, a certification of available funds and the payment was recorded on the general ledger, which made it “fine,” Robinson said, adding “the warrant process had been followed.”
“The May 27 payment has no supporting documentation, certification of funds, or commission authorization,” Robinson pointed out.
The auditor said an additional 24 months of wire payment history has been requested from UMB for review.
“There are no written procedures internally for the treasurer’s office for all forms of electronic fund transfers,” Robinson said. He recommends the treasurer draft procedures for all forms of electronic fund transfers.
Secondly, Robinson recommends the county should adopt a policy of no “no-token” wire transfers, notifying UMB of its policy so their system may be updated not to allow this type of transaction.
“There should never be anything that level of urgency. All large payments of any type are scheduled ahead of time. There should never be a cause for an immediate wire,” Robinson said.
“If someone is not here, the next day or the following week the wire can get done,” he said.
The commissioners on Monday indicated they supported the recommendations of the auditor’s review, though the opinion was the county already had necessary procedures in place that would have been prevented the scam had those procedures been adhered to.
“Everything has been in place. They just didn’t follow it,” said Duane Soper, second district commissioner.
Schieber said he wold like to review all the banking agreements the county has with UMB and other banks. Schieber said the activity on May 27 might have been stopped by the bank if there had been a contractual agreement that says it takes two authorized people to wire money.
“At least he would have had to call his deputy treasurer and authorize this,” Schieber said.
Roper agreed but added she isn’t convinced that still would have stopped it.
“The deputy works for the treasurer. If the treasurer told her he had verified the request with the presiding commissioner, it probably would have been done (approved by the deputy treasurer),” Roper said.
“We can have all kinds of procedures in place, but if they are not followed. . .” Schieber added.
Willard, who was not in the room when commissioners were presented with the auditor’s report, said he believes the auditor’s recommendations “are reasonable and well thought out.”
“We should put a more concrete policy in place,” Willard said. “What he is suggesting is very reasonable. I agree with the recommendations and will implement them, in the form of a formal written policy, no later than July 15.”
According to county officials, forensic specialists assisting in the investigation identified the origin of the email was from a source outside of the county. From the investigation it has been concluded that the county’s email system, county computers and county servers were not compromised, officials said this week.
County officials have told The Landmark that the FBI does not sound hopeful about being able to track down the perpetrator of the scam.