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A small town in North Idaho has been scammed out of half a million dollars by man posing as its construction contractor.
The City of Clark Fork, near the Clark Fork River Delta on Lake Pend Oreille, in mid-November transferred $483,519 in grant funds meant to pay for excavation work done last summer as part of a multi-year water infrastructure replacement project, said Clark Fork Councilman Jay White.
After the payment was made, the contractor, Noble Excavating based in Libby, Mont., became suspicious and alerted the city.
Officials worked with the receiving bank to try to freeze and reverse the payment, but there was not enough money left in that account, White said.
White described it as a “manin- the-middle” attack, where the scammer impersonates an intermediary in the chain of custody of funds.
In this case, they posed as the contractor’s management in emails with the city’s engineer, Century West Engineering. The scammer persuaded them of the need to transfer the money to a different account.
The city had no reason to be suspicious, White said. Staff from the contractor attended the meeting in October where the council discussed and approved the payment. The city was never in direct contact with the scammer, White said.
The FBI and Secret Service are investigating, he said.
Noble Excavating Project Manager Eric Drake said they had no contact with the scammer, either. The company has not received any of the funds, he confirmed.
“We would like to; it’s a lot of money,” Drake said.
Century West did not immediately return requests for comment.
The funds for the project came from the American Rescue Plan Act through a grant by the Idaho Department of Environmental Quality. White said he is not sure yet what the next steps for the project will be or how to handle the loss of federal funds, but the city is in contact with its attorneys and insurer to determine how to proceed.
White said he is still optimistic they will recover the funds. A nearly identical scam this summer swindled $1 million from Gooding, a town in Southern Idaho. Two months later, the FBI recovered a majority of the funds after they had been transferred to another account, according to a Gooding news release.
White said Clark Fork is looking at ways to improve its authentication methods. He said it’s a good reminder for people to learn about how to protect themselves from fraud with basic cybersecurity precautions.
In 2023, the FBI Internet Crime Complaint Center received 21,489 complaints about business email compromise schemes with losses exceeding $2.9 billion.
James Hanlon’s reporting for The Spokesman-Review is funded in part by Report for America and by members of the Spokane community. This story can be republished by other organizations for free under a Creative Commons license.
