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NEWPORT — The City of Newport will get back a majority of the more than $330,000 that was stolen in a cybercrime earlier this year.
About 75% will be covered by insurance, Newport Mayor Keith Campbell said at the Monday night city council meeting April 6.
City officials discovered Wednesday, Feb. 11 that $336,588 in funds was stolen in what they described as a sophisticated online scam. Of that, the city expects at least $252,441 will be covered by its insurer, the Association of Washington Cities’ Risk Management Service Agency.
“That’s very good news under the circumstances,” Campbell said. “So we can all be pleased with that.”
The city may receive even more of the remaining funds from RMSA, Campbell said. He expects RMSA to decide on that within the next week or two based on additional information provided by the city.
“It wasn’t a straightforward claim — we kind of had to look at different avenues,” Campbell said. “But it worked.”
The money was sent to a fraudulent account by staff in January. The staff thought the account was run by RMSA, whose insurance premium for the year had already been paid. The day that payment cleared, the scammer duplicated the invoice and requested a transfer to the fraudulent account, Campbell said.
“It just happened to be that the ‘bad guys’ wanted the transfer the day that check actually cleared from RMSA,” Campbell said. “So it was very well-organized, well-timed on their part.”
After the cybercrime, more funds were transferred from another city account to compensate for the loss, Campbell said. He did not know which one. Last month Campbell mentioned the possibility of selling city land, such as the 10-acre property near the Lazy Acres trailer park south of the city.
Investigations into the crime and staff and review of city policies and procedures are still ongoing. Law enforcement, including the Liberty Lake Police Department, is conducting the investigations. Newport Police Chief Wade Nelson said the FBI was unlikely to look into the crime, as they only investigate cyberthefts of $500,000 or more.
“We’re wrapping some up,” Campbell said of the investigations.
A staff member was placed on administrative leave, though Campbell would not comment on who it was or whether the person had returned to work.
Monday, April 6, the council unanimously approved updates to the clerk-treasurer job description, last updated in 2023. Updates included the current salary range, a responsibility to track and coordinate training for various departments, a background check, the ability to be bonded and possession of a driver’s license free from serious or frequent violations as well as an Equal Opportunity Employer statement.
Also unanimously approved were amendments to the city’s policies and procedures for Electronic Fund Transfers, last amended in 2024.
The city now requires the authentication of changes to existing EFTs or changes to existing payment methods from check to EFT. For the new or updated payment method to be approved and for any changes to be made to the city’s financial software system, the administrator must conduct a second independent verification at the end of the authentication process.
Regarding the direct deposit of payroll, any change to employee banking information now requires a voided check or letter from the financial institution.
“It was an existing policy that we were operating off of, and some changes that we find value in making,” city administrator Abby Gribi said at the meeting. Last week, Campbell referred to the amendment as an “added layer,” but would not comment further.
Before adjourning the meeting, the council went into executive session with their attorney to discuss potential litigation or legal risk. The session lasted about an hour, and no action was taken afterward.
DON GRONNING CONTRIBUTED TO THIS REPORT.
