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Dallas County turns over $2.4 million 'potential fraudulent payment' to the FBI

The FBI has been asked by Dallas County to investigate a $2.4 million "fraudulent payment." County Administrator Darryl Martin said the payment is unrelated to a cyber breach in October.
Caron Badkin
The FBI has been asked by Dallas County to investigate a $2.4 million "fraudulent payment." County Administrator Darryl Martin said the payment is unrelated to a cyber breach in October.

Dallas County apparently was the victim of a $2.4 million "fraudulent payment" and has turned the matter over to the FBI. That's according to Dallas County Administrator Darryl Martin.

Martin posted a statement about the incident on the county's "Notice of Cyber Crime Event" web site, which was created after what officials described as a "cybersecurity incident" on Oct. 19.

"On November 17, 2023, Dallas County became aware of a potential fraudulent payment in the amount of $2.4 million dollars unrelated to the October cyber incident, Martin wrote in the post on Monday. "All evidence was turned over to the FBI suggesting that Dallas County was the victim of a cyber crime."

Martin said it appeared that someone "used a fraudulent business email impersonating one of our partners and engaged in social engineering." He added that Dallas County immediately began an investigation and "remedial measures are being taken."

Dallas County had hired a company in August — before the October attack and the reported fraudulent payment in November — to study the country's computer's systems. A report from that company is expected to be discussed by county commissioners on Tuesday.

After the October attack, county officials hired a cybersecurity firm to conduct a comprehensive forensic investigation "to assist in our efforts to contain the threat, investigate the nature and scope of the attack, and enhance our security efforts to reduce the likelihood of recurrence...,"according to an earlier statement on the cyber crime event website.

That statement asserted that there was no evidence of "ongoing threat actor activity in our environment" and that the attack appeared to have been successfully contained.

Dallas County is one of many local governments — locally and nationwide — that have been targeted by hackers.

A May 3 cyberattack compromised personal information for more than 25,000 Dallas city personnel.

The benefits-related information was maintained by the city's human resources department.

Later that month the hacker group Royal threatened to leak sensitive information via their blog. At the time, city officials released a statement saying they were aware of the threat.

In late June, the Dallas City Council approved a $3.9 million cybersecurity contract, with little discussion. The contract authorized the city manager to pay the consulting group Netsync for “support of a threat and anomaly detection system” for the city’s IT department.

For weeks following that incident, Dallas officials claimed no sensitive information was accessed. But three months later, the city confirmed it had known personnel information was likely compromised as early as June 14.

The data breach included city names, addresses, Social Security numbers, medical information and health insurance information.

The Dallas Central Appraisal District also was the target of a cyberattack about a year ago.

More recently, hackers have hit a West Texas gas company, Austin Meals on Wheels, a San Antonio dental office and Texas' Medicaid system.

KERA's Marina Trahan Martinez contributed to this report.

KERA News is made possible through the generosity of our members. If you find this reporting valuable, consider making a tax-deductible gifttoday. Thank you.

Marina Trahan Martinez is KERA's Dallas County government accountability reporter. She's a veteran journalist who has worked in the Dallas area for many years. Prior to coming to KERA, she was on The Dallas Morning News Watchdog investigative and accountability team with Dave Lieber. She has written for The New York Times since 2001, following the 9/11 attacks. Many of her stories for The Times focused on social justice and law enforcement, including Botham Jean's murder by a Dallas police officer and her subsequent trial, Atatiana Jefferson's shooting death by a Fort Worth police officer, and protests following George Floyd's murder. Marina was part of The News team that a Pulitzer finalist for coverage of the deadly ambush of Dallas police officers in 2016.