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Puerto Rico Gov't suspends 3 as Feds probe $4M scam

February 17th, 2020 | Tags: Puerto Rico hacking scamp dismissed Online Scam
Protesters demonstrate outside the Puerto Rico Capitol in San Juan in January after a warehouse full of relief aid dating to Hurricane Maria in 2017 was discovered and prompted the firing of the country's emergency manager. By Gabriella N. Baez/Reuters

SAN JUAN, Puerto Rico— Puerto Rico’s government said Friday, February 14, 2020, that it suspended three employees as federal agents investigate an online scam that attempted to steal more than $4 million from the US Territory.

Manuel Laboy, executive director of Puerto Rico’s Industrial Development Company, said rigorous procedures were not followed when the agency received an email alleging a change in banking accounts that prompted someone to transfer more than $2.6 million to a fraudulent account in the U.S. mainland last month.

“We do not take this lightly, and there are consequences,” he said.

Laboy declined to share the names and positions of those suspended, saying only that it was one employee from his agency and two from Puerto Rico’s Commerce and Export Company, which sent $63,000 as part of the scam. He added that the FBI has been able to freeze the money sent, which involves public pension funds.

“This situation did not affect and will not affect pension payments to retirees,” he said.

The scam also targeted Puerto Rico’s Tourism Company, which sent $1.5 million, police have said.

Computer was hacked

José Ayala, director of the fraud unit with the police department’s bank robbery division, said the scam began when someone hacked into the computer of a finance worker at Puerto Rico’s Employment Retirement System in December and sent emails to government agencies. He said government officials realized what had happened when someone at the retirement agency asked why they had not yet received the funds, only to be told they had already been sent.

Ayala said the FBI is investigating how the computer was hacked.

José Quiñones, president of Obsidis Consortia, a nonprofit cybersecurity organization in Puerto Rico, said those types of attacks are common and can be prevented to a certain point.

“No system is 100% safe,” he said, adding that training employees on cyberattacks and keeping software up to date is key.

“This is a well-coordinated attack,” he said. “Where the government failed greatly was in the procedures, not the technology.” (Associated Press)

8 Responses to “Puerto Rico Gov't suspends 3 as Feds probe $4M scam”

  • BuzzBvi (17/02/2020, 23:10) Like (2) Dislike (0) Reply
    Need to check what is going on at First Bank!!
  • Diaspora (17/02/2020, 23:37) Like (10) Dislike (0) Reply
    Puerto Rico (Porto Rico, rich port) is an almost failed state. It is poster child for corruption, mismanagement.....etc. It has a $72B debt and welfare and disability payments are common place. Further, natural disasters , ie, hurricanes , earthquakes....etc have compounded its fiscal problems. It had a chance and opportunity to pull itself up by its bootstrap but thus far has made little progress. Its economic problems have force thousands to bolt to the mainland, decreasing the populations in many subdivisions. It offered huge tax incentives to pharmaceutical companies to locate in PR. However, during the Clinton administration, mainland companies complained about the incentives being unfair. Consequently, in 1997, a 10-year phase out occurred, starting the demise of the PR economy. Additionally, the large US Navy base (Naval Station Roosevelt Roads) was prematurely closed in 2004, taking approx 6000 jobs and 1200 sailors and $300M Economic contribution, adding to the economics woes. PR is seeking statehood but the US Congress may not be playing ball; PR has to bring something to the table. It was the hub for American Airline/American Eagle in the region but that has gone. A sad situation.
    • In the struggle (18/02/2020, 16:56) Like (1) Dislike (0) Reply
      Even if it is true don't bite the hands that fed your during IRMA.
  • Disinterested (18/02/2020, 11:56) Like (3) Dislike (0) Reply
    As a youngster, PR had this allure to it, ie, one step remove from being NY. But in reality it is not too much different from other regional countries. If it were not closely aligned with the US, things would have been so much worse. PR residents are adept at managing social programmes. So much opportunities yet so little progress. PR is good example for the VI; the VI had an opportunity and is squandering it. For the $$$B that flowed through it over the decades, what does it have to show for it? Not much. USVI you are in this boat too. What do you have other than being a territory of the US? Other regional. Other regional countries, after decades of independence, every day is still a struggle for the 99%. When are things going to change for little independent brown dots in the Carribean Sea? Unite!
  • Political Observer (PO) (18/02/2020, 22:36) Like (3) Dislike (0) Reply
    $72, 000,000, 000.00 in debt! What did PR spend $72B on; hopefully it was on appreciating assets but I doubt it. In addition to bond debt, it has approx another $50B in unfunded pension. Its debt is more than most of the 50 states; it looks like only California, New York and Massachusetts have higher debt than PR. Its debt-to-GDP ratio is 70%; by comparison, the mean states debt-to-GDP is 17%. How is PR going to get out of this deep and widening hole. Can it save, cut, borrow its way out of it? A new law passed by Congress in 2016, may let it file for bankruptcy; it will be the largest government to file for bankruptcy.

    This debt load is like a millstone around its neck that is hamstringing its economic growth development and sustainability. The interest on its loans is staggering. If it does not get debt forgiveness from its creditors or relief from bankruptcy, it will take a long, long time, if ever, to get out of debt. This debt load weighs heavily on its economy, quality of life, standard of living, ability to borrow, service delivery, capital project revitalization, capital project reinvestment, maintenance and operations..........etc, etc, etc.
  • Quiet Rebel (19/02/2020, 06:48) Like (3) Dislike (0) Reply
    Yes, Puerto Rico’s fiscal condition is dismal, ie, its debt ($72B) is high, its debt-to-gdp high, its economy struggling, high brain and skill drain, high unfunded pension liability, fraud/waste .......etc. Nonetheless, let’s look a little closer to home in our own backyard at the USVI and VI. The USVI has a debt load of approx $2B, a debt-to-gdp of approx 68-72%, economy struggling, unfunded pension liability (GERS).....etc. On the VI side, it has a debt load of approx $120M, debt-to-gdp of 12% ( well below the tipping point of $40% for developing countries; 60% for developed countries), $414M 2020 O&M budget, approx GDP $1B. The higher the debt-to-gdp the greater the struggle for economic sustainability and the higher the opportunity to default.

    Though the VI appears to be doing better than its neighbors, let’s not be popping the champagne; it must pay attention to the fire in its nrighbors’ house. The VI has its issues. Despite a $414M budget and a $1B GDP, what has it got to show for it. For example, its infrastructure, ie, roads, water, sewage, drainage, electricity, telecommunications, ports...etc are not First World, though it had the means and opportunity to be First World.

    There is a fierce urgency of now to act, for the window of opportunity to capitalize on its good fortune is closing fast. Its main economic pillars are tourism and financial services; both are highly fragile. Financial services is showing some stress fractures that can grow into fissures. And tourism success is a function of the economies in advanced countries. It is highly vulnerable to economic shocks here at home with economic down turns in developed countries. Economic diversification must be atop the heap on the bucket list. Leh us geh ah dun!
    • RealPol (19/02/2020, 16:49) Like (2) Dislike (0) Reply
      If the prudent suggested debt-to-gdp ratio developing countries is 40%, it looks like the BVI at 12% debt-to-gdp ratio got some room to borrow to invest in capital projects. A debt-to-gdp ratio of 55% is relatively prudent. The BVI is a low tax jurisdictions so it has opportunities to sell revenue bonds (water, sewage, electricity) for capital projects improvement and general obligation bonds on property (land and facilities) for roads, schools........etc. Nonetheless, the current budget seems adequate to meet capital and operations and maintenance needs. 2020 budget is $414M.
      • @realpol (19/02/2020, 20:03) Like (1) Dislike (0) Reply
        @RealPol, you are encouraging government to go hog while borrowing and spending. It needs a strategic in generational spending plan. First, all the late annual financial audits need to be complete. Government cannot operate effective without the audits. A pilot cannot leave the airport without a flight plan or a captain leave port without a float plan or a bus driver leave the terminal without a route plan. If they do, they are operating in the dark.

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