County treasurer: $13 million recovered in $19 million fraud case
BAKERSFIELD, Calif. (KBAK/KBFX) —
Kern County Treasurer Jordan Kaufman on Tuesday announced that the county has recovered just under $13 million it lost in a $19 million fraud.
Clearing (checking) accounts tied to the Kern Superintendent of Schools and the Kern Community College District were the target of a large-scale theft over a period of three years beginning February 2014. Wells Fargo sounded the alarm last month and county accountants spent the next several weeks scouring banking records to determine the size of the loss.
The FBI and the Kern County District Attorney's office are working together on the criminal case. They have not yet named any suspects.
The large recovery came about as a result of bankers reversing specific fraudulent charges. According to banking law, fraudulent purchases can be reversed without a merchant's consent up to 60 days after the transaction, Kaufman said. That's where the initial recovery effort was directed.
Beyond 60 days, however, merchants may accept or reject a bank's request to refund stolen money. Kaufman said the "overwhelming majority" of the business conducted with the stolen funds was with large corporations and financial institutions, which have largely accepted requests for refunds.
Kaufman is optimistic that more of the money can be recovered, but acknowledged that the older the transactions are, the slower the recovery process will be.