Expert shocked by amount scammed from parish

BBB investigator says Port’s St. John XXIII is among several Catholic organizations hit by scheme, but $510,000 loss stands out
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press staff

When Lisa Schiller, director of investigations and media relations for the Better Business Bureau in Milwaukee, learned that St. John XXIII Catholic Parish in Port Washington had been scammed out of $510,000, her reaction was quick.

“My God in heaven ... unbelievable,” she said. “That’s the largest amount I’ve ever heard of.”

Schiller said the parish is the second religious institution she knows of in the Milwaukee area struck by similar scams in recent weeks.

In the other case, she said, Seton Catholic Schools in Milwaukee County was taken for $38,000 in an email scheme.

“It’s a relatively new scam,” Schiller said. “This is really concerning.”

Officials occasionally heard of similar schemes occurring elsewhere in the past, she said.

“Now all of a sudden we’re seeing it pop up here locally,” Schiller said. “It’s just awful.”

In the case of St. John’s XXIII, the parish in late February received an emailed letter purportedly from CG Schmidt, the general contractor on the St. John XXIII School expansion project, that said the firm was changing banks and provided different account numbers for payments, authorities said.

A few days later, a woman called the parish claiming to be CG Schmidt’s accountant asking whether the letter had been received.

When the contractor’s next bill came due on March 4, parish officials transferred the money only to be notified by Port Washington State Bank later that day that the transaction was fraudulent. CG Schmidt never received the funds.

Port Washington Police Chief Kevin Hingiss said his department is working with the FBI and U.S. Attorney’s office to investigate the scam, which is sometimes called a payment redirection scam.

They have issued about a half-dozen subpoenas in the case, he said, virtually all of them out the state.

In the case of Seton Schools, its finance department received an email from an organization it worked with on a regular basis that instructed school officials to wire money to a bank account, Schiller said.

Schiller, who said these sorts of schemes are also called business email compromise scams, said they are fairly sophisticated and often involve large amounts of money.

“As long as something works, they’ll keep trying it,” she said.

Schiller said that in general scammers often get their information off the so-called dark web, where lists of virtually every type of information are sold.

The scammers are often located overseas, she said, which makes it “very, very unlikely” the funds stolen in these types of cases, particularly when wire transfers are involved, will be recovered.

“Education is the key,” Schiller said. “The more people we can let know, the more aware they will be.”

Businesses, she added, need to educate their staff that even if an email looks legitimate, it should be treated as suspicious.

Mike Didier, a real estate agent with Re/Max United in Port Washington, said these types of scams are rife in his industry. Scammers will often send legitimate-looking emails changing the location where funds should be sent.

“When someone changes the wire instructions, that is a massive red flag in our industry,” he said. 

The scams often originate from hacked emails, Didier said.

“They’re watching the whole transaction, the contacts,” he said, adding it’s not too difficult to create letterhead and spoof phone numbers to make things look real. 

Because of the amounts of money involved, scammers have an incentive to research their subjects and spend time making everything look legitimate, Didier added.

“For this kind of money, they’ll put in a lot of time,” he said.

As the St. John XXIII fraud is being investigated, the parish’s $5.6 million building project is moving forward as planned.

The parish is building a 19,700-square-foot addition to the east side of St. John XXIII’s St. Peter’s School and renovating the existing school, work that is expected to be completed by September, allowing the school to consolidate classes at the St. Peter’s Campus and the parish to sell its St. Mary’s School building.

School officials said they are looking to see what funds may be recovered and what options they have to replace any lost money.

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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