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A fraudulent payment of nearly $700,000 that apparently eluded county auditors is under investigation by the San Benito County Sheriff’s Office.
According to a news release issued by the County Administrator’s Office, the investigation into the payment was launched on Oct. 16. The release stated that the payment had been approved by the Auditor-Controller’s Office when the irregularities were discovered.
Like the $360,000 library embezzlement that led to the sentencing of two former employees last summer, the alleged fraud was caught and reported by an external source—in the latest case, by a bank.
According to the release, County Treasurer Melinda Casillas reported the suspected fraud after an unnamed bank alerted her of the transaction on Oct. 15. Officials said the request came from someone “posing as a contractor as part of a suspected phishing scam,” in which hackers attempt to trick victims into revealing sensitive information.
The release also noted that the Auditor-Controller’s Office, led by Joe Paul Gonzalez, an elected official, is responsible for verifying such payments.
The Treasurer’s Office and the bank have since filed a fraud claim with the FBI and requested a reversal of the payment.
On Oct. 17, Gonzalez released a statement saying the funds had been recovered. He said that with the growing use of artificial intelligence frauds are becoming “more sophisticated and are occurring within increasing regularity.”
The release stated that the payment was recovered after a joint effort from county staff and the Auditor-Controller and Treasurer’s offices.
“I commend my entire team and the County Treasurer and her staff, for their rapid response and the persistence required to trace and secure the reversal of funds,” said Gonzalez. “Our primary goal is the preservation of public funds, and we are relieved to have achieved that goal.”
Gonzalez also said his office was implementing measures for reinforcing and strengthening internal controls within the county’s accounting system, and enhancing staff training and fraud awareness.
Just a week earlier, on Oct. 10, the county released a request for proposals for an external audit that will evaluate internal financial processes and controls, and recommend reforms. The final report is expected to be presented to the public by late winter.
The Board of Supervisors will hold a special meeting on Oct. 21 to discuss the investigation of the attempted fraud.
Copies of the news releases are below
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