Fraud in county government checking accounts larger than first thought, treasurer says
BAKERSFIELD, Calif. (KBAK/KBFX) —
The effort to recover millions of dollars taken fraudulently from county government checking accounts continued Friday, with investigators announcing the amount of stolen money is greater than they first thought.
Initially, Treasurer Jordan Kaufman told Eyewitness News the amount missing was a "seven-figure number," but would not go into greater detail.
Asked today whether the updated figure is an eight-digit number, he declined to say.
Kaufman did say, however, that significant progress has been made in getting the money back. He likened it to the process that occurs when a private credit or debit card is hacked and banking and credit institutions slowly reverse all the fraudulent transactions. As of Friday, it is believed the county has retrieved about 60 percent of what had been lost.
But because the fraud stretches back at least a year, it is likely some of the money may be lost for good. How much is not certain.
"I would just say that we are working with the bank, we are working with the school districts involved, and we are trying to recover as much money as we can," Kaufman said Friday.
In the early stages of the investigation, officials said the fraudulent activity involved hundreds of transactions, with amounts mostly less than $1,000. The accounts affected belonged to the Kern Superintendent of Schools and the Kern Community College District.
A finance official for the superintendent's office was baffled in the early days of the investigation, telling Eyewitness News that their accountants saw no problems with their books. As a safety mechanism, school-related clearing accounts are only populated with sufficient funds to cover a list of pre-approved and heavily vetted expenses. That official said the schools have received all the goods and services that they funded and the accounts have not bounced.
Both entities said the fraud was unlikely to disrupt day-to-day operations.
The district attorney's office is heading the forensic investigation and Eyewitness News learned earlier this month that they are receiving assistance from the FBI.