Teton School District

The Teton School District has recovered all but $300,000 of the funds that were recently lost through a phishing scam.

DRIGGS — An FBI-led investigation has helped Teton School District 401 recover $484,000 of the $784,000 in funding that it accidentally sent to online thieves posing as the contractor it hired to build two new elementary schools.

The fraud, known as a “phishing” scheme, was discovered in December. The unknown suspects sent the district an email claiming to be Headwaters Construction and providing instructions for submitting the next payment for work completed.

Actual officials with Headwaters assured the district a few days after the payment was rendered as directed in the email that they had not initiated the request, said District Superintendent Monte Woolstenhulme.

Elsewhere in eastern Idaho, officials with Soda Springs Joint School District 150 confirmed Tuesday they received a similar, fraudulent email, claiming to be a request for payment from Headwaters. However, the Soda Springs officials didn’t send any money.

“Soda Springs School District, who is also working with Headwaters Construction to build the Tigert Middle School gym and classroom additions, was approached in a similar fashion as Teton School District,” officials with School District 150 said in a news release. “Our school district personnel followed established protocol and did not wire any funds.”

The release adds that the Soda Springs district continues to work with local law enforcement and the FBI and declined to comment about the amount of money sought through the scam, or the date when they received the email. The district intends to release details at a later date, according to the release.

Woolstenhulme said the Teton School District contacted the Teton County Sheriff’s Office about the theft, and the FBI and the district’s financial institution, the Bank of Commerce, were brought in to assist. Woolstenhulme did not offer details of how investigators and the Bank of Commerce managed to recover some of the lost funds, nor did he provide an update on efforts to recover the $300,000 that is still missing.

“It’s an ongoing investigation,” Woolstenhulme said.

Woolstenhulme said the district’s insurance provider, the Idaho Counties Risk Management Program, is reviewing whether or not the funds that remain missing should be covered by insurance. The amount still missing falls below the Risk Management Program’s coverage cap, Woolstenhulme added.

Woolstenhulme said the district also fell victim to an internet phishing scheme in March 2017, when it sent $20,000 to a thief posing as a vendor. The funds weren’t ever recovered, but the Risk Management Program covered the loss, he said.

The Teton School District suspended its business manager, Carl Church, following the most recent phishing scheme. Church submitted his resignation in late December. District officials said Church has never been the focus of a fraud investigation.

Woolstenhulme said the district has implemented safeguards on construction payments to avoid being victimized in the future. For example, payments will now be made only to authorized Headwaters officials. He said the district is also providing cybersecurity training to certain personnel.

“We’re much more cautious and safeguarded now than we’ve ever been,” he said.

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