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West Allis-West Milwaukee School District loses $843,000 to scammers

Posted at 5:06 PM, Mar 10, 2020
and last updated 2020-03-10 19:42:51-04

The West Allis-West Milwaukee School District thought it was making an $843,000 payment to the general contractor that's building its new recreation and community center. Still, as police have learned, the district was duped into sending that money to a scammer.

"Well, the kids lose out in the end," said parent Jerry Cole.

Parents like Cole in the West Allis-West Milwaukee School District are frustrated after finding out hundreds of thousands of taxpayer dollars are now in the hands of criminals.

"It's sad to say that somebody has to stoop that low and just outright steal money," Cole said.

The school district said an online payment last October was intended to go to CG Schmidt, the general contractor that's building the district's new facility. West Allis police said in a statement on their Facebook page that criminals intercepted the payment, and now the FBI is involved.

"We believe the money was ultimately transferred overseas," said Deputy Chief Chris Botsch.

Just one year ago, St. John XXIII Catholic Church in Port Washington fell victim to the same scam while building a new elementary school.

"I'm kind of shocked that the same sort of thing could happen not far from us and in almost the identical fashion that it had happened to us," said pastoral coordinator Bill Henkle.

Henkle says the scammer sent an email claiming to be CG Schmidt's chief financial officer to get the church to pay more than half a million dollars.

"So we got the wire instructions from presumably CG Schmidt, wired the $510,000 thinking it was going to them to pay for this bill and in fact it landed at this bank down in Texas," said Henkle.

Henkle says law enforcement recovered some of the funds, and insurance covered the rest. Cole is optimistic his son's school district will be able to do the same.

"I hope they do recoup something," he said. "Anything is better than nothing."

The West Allis-West Milwaukee School District says this issue isn't expected to impact construction on their project. The district has hired local attorneys to try to recover the stolen funds.

CG Schmidt sent TMJ4 News the following statement:

"Unfortunately, in today's day and age, organizations are susceptible to these fraudulent attacks, and despite our earlier outreach warning to clients, the West Allis-West Milwaukee School District fell victim to a similar incident last fall."

"None of our clients have experienced this type of phishing attack since last fall, but all companies must remain vigilant at all times regardless of industry or type of work. We are again reaching out to all of our clients and stressing the importance of protecting such private information and being ever diligent in preventing and monitoring for fraud and phishing scams."

- Dan Davis, senior vice president of CG Schmidt

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