Massive theft loss from Ohio’s Granville Rec partially covered by insurance
Massive theft loss from Ohio’s Granville Rec partially covered by insurance | Insurance Business America
Insurance News
Massive theft loss from Ohio’s Granville Rec partially covered by insurance
Policy will cover more than a third of missing funds
Insurance News
By
Kenneth Araullo
After nearly $713,000 was stolen from a Granville Recreation District (GRD) loan fund at Park National Bank last year, the organization’s executive director confirmed that a portion of the funds will be returned via insurance coverage.
In December, the GRD authorized a wire transfer of $713,000 from a bond note at Park National Bank to pay the Shelly Company for paving projects at Wildwood Park and Raccoon Valley Park in Granville.
However, it later emerged that the funds never reached the contractor. According to a report by the Granville Police Department, the bank mistakenly sent the money to a fraudulent account on Dec. 22.
Upon discovering the payment had not been received by Shelly Company, GRD officials initiated a flurry of actions.
“When Shelly asked about payment for the work, we realized something had gone wrong,” Andy Wildman, GRD executive director, said in a report.
The district quickly reported the incident to law enforcement and engaged both its insurance company and TrustedSec, a cybersecurity firm, to conduct internal and business email compromise (BEC) investigations.
“We did an internal forensics investigation and a ‘BEC’ investigation,” Wildman said. “We wanted to use that as an opportunity to explore areas that we could improve in terms of our [information technology] and what we were doing.”
Following these investigations, the recreation district has enhanced its cybersecurity measures, including expanding training protocols, increasing cyber insurance coverage, refining how it manages invoices, and switching to a new IT provider to bolster security.
Although the stolen funds have not been recovered, GRD’s insurance through Ohio Plan Risk Management Inc. is expected to mitigate some of the financial damage.
“We are working with our insurance company and all the parties involved in the ongoing investigation,” Wildman said. “We believe our insurance is going to cover $275,000.”
The resolution for the remaining $445,000, however, remains uncertain, though Wildman emphasized the district’s commitment to resolving the issue without resorting to taxpayer funds.
“Our leadership team is doing everything we can every day to make sure that we do not spend taxpayer money to solve this issue,” he said.
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