Cybercriminals Defraud Small New England Town Out of Over $2 Million in Taxpayer Money

A small town with a population of just over 6,000 in New England is dealing with the fallout of an email fraud scheme that cost it around $2.3 million. Officials with the town of Peterborough, New Hampshire, made the announcement on Monday after an investigation that began on July 26, the Associated Press reported.

Peterborough is located in southern New Hampshire and is roughly 35 miles southwest of Manchester, the largest city in the state.

The trouble was first noticed when town officials discovered that the local ConVal School District had not received a $1.2 million monthly funding transfer. Later, on August 18, officials discovered another planned transfer of around $1.2 million had not been sent to a contractor working on a local bridge project.

The investigation found the root of the issue in email exchanges with the town's finance department. It appeared that cyber thieves posed as school staff members using fake emails and forged documents to dupe the town government into sending them the money. While the specific method was unspecified, the AP reported that "similar means" were used to get the bridge construction money as well.

email scam new hampshire
A small New Hampshire town was defrauded out of millions by an email scam. In this photo, a representative image of a hacker on a computer. Chesnot/Getty Images

"It pains us to inform the residents and taxpayers of Peterborough that like so many other towns and cities, we have fallen victim to an internet-based crime that has defrauded our taxpayers," Select Board Chair Tyler Ward and Town Administrator Nicole MacStay said about the incident in a joint statement.

"It's really a gut punch, that's for sure," Select Board member William Kennedy told NBC 10 on Monday.

The AP reported that Peterborough will not be able to retrieve the stolen money by trying to reverse the transaction. It is also unclear how much will be covered by the town's insurance policies. The town government has reached out to the office of Governor Chris Sununu and its state congressional representatives for assistance.

"These criminals were very sophisticated and took advantage of the transparent nature of public sector work to identify the most valuable transactions and focus their actions on diverting those transfers," the joint statement from Ward and MacStay continued.

The town has also received a pledge for assistance from U.S. Senator Maggie Hassan. Hassan, a previous governor of New Hampshire, currently chairs the Emerging Threats and Speaking Oversight Committee and called the Peterborough situation a "devastating attack."

"We know that cybercriminals are smart, savvy, and able to identify and attack our weak spots – and we must make sure that our state and local governments are ready," Hassan said.