A Bay Area city was tricked out of almost $1 million in an elaborate payment scam after fraudsters allegedly masqueraded as a construction firm — and then as a city staffer — to push the fake transaction across the finish line.
The city of Pittsburg sent a $913,000 wire transfer on Feb. 12 to what officials believed was an account for Discovery Builders Inc., the contractor tied to the city’s planned Dream Courts sports and recreation complex.
The deception went unnoticed for nearly a week. City officials only discovered something was wrong five days later, when the legitimate builder contacted them to ask about the missing payment.
According to court documents, the scheme relied on a subtle but critical email spoof: the phony Discovery Builders address included one extra lowercase “L,” making it easy to miss at a glance.
Investigators say the scammers then broke into the email account of Sara Bellafronte, an assistant to the city manager, and used her identity to communicate with a city finance employee.
Posing as Bellafronte, the fraudsters allegedly said the updated banking details had been confirmed verbally and directed the employee to make the change in the city’s payment system.
Once the money was sent, it was rapidly moved through a complex trail of bank accounts, triggering an FBI investigation into the cyber-enabled fraud.
Authorities later obtained 18 search warrants tied to 116 accounts and traced the stolen funds to two suspects in the United States and a third individual in Nigeria.
No suspects have been arrested or publicly identified.
Investigators froze the account that received the city’s money, allowing Pittsburg to recover about $696,000.
Officials said they were seeking insurance coverage for the roughly $218,000 still missing.
One Illinois man who received some of the money appeared to investigators to be an unwitting pawn in the scheme, court records say.
Believing he worked for a legitimate company called “Tyco Alloy Industries,” he moved the funds and bought about $217,000 in bitcoin, sending it to a cryptocurrency wallet.
Discovery Builders President Louis Parsons said the company didn’t blame the city.
“Somebody was pretty sophisticated to accomplish this,” Parsons told the San Francisco Chronicle. “I just feel bad for the city of Pittsburg that they had to deal with this.”
The company has since had a representative physically collect checks from the city.
Discovery Builders, a Seeno family company, ultimately received the full $913,000 within 60 days of learning about the scam.
The Dream Courts project is a planned 42,000-plus-square-foot facility aimed at boosting sports tourism. Pittsburg approved the project in 2020 for no more than $3 million, but rising costs and labor-union negotiations delayed construction.
Parsons said the facility could be finished within the next 60 days.
The city said it has since beefed up payment verification, changed financial workflows and adjusted IT staffing.
“This crime is both upsetting and a hard lesson for how we can improve our security. I share the community’s disappointment that criminals were able to exploit our systems,” Mayor Dionne Adams said.
The city faces an estimated loss of roughly $100,000, According to The Mercury News.
Pittsburg released details of the scheme Wednesday, saying doing so would no longer compromise the investigation.
