In December, Warren County was defrauded out of $3.3 million. As law enforcement agencies investigate and county officials try to recoup the lost funds, they’re also trying to understand how it could’ve happened in the first place.
The Warren County Board of Supervisors met for their annual organizational meeting Tuesday. But, the supervisors had more to do than simply go over the pro forma introductory agenda items and conduct oaths of office.
Warren County Sheriff Jim LaFarr was present to update the board on his department’s multi-million-dollar fraud investigation.
“We’ve been working very closely with the New York State Computer Crimes Unit, the U.S. Secret Service, and very quickly it was evident to us that this was not a sophisticated computer crime, not an elaborate form of phishing. This was a very basic act of fraud that was easily preventable,” said LaFarr.
Through two separate transactions in December, the county paid $3.3 million in invoices via an automatic clearing house, or ACH, transfer to what it thought was a paving company that had done work for the county. But it turned out that the payee, which the county thought was Peckham Industries, was a fraudster.
The first payment on Dec. 12 totaled $2.1 million and was fully processed. The county was then able to reverse a second payment of $1.2 million made on Dec. 23.
Officials say at least $800,000 of the first payment appears to be recoupable, with some additional restitution potentially coming from New York state.
Still, Kevin Geraghty, chair of the Board of Supervisors, has major concerns.
“It’s a huge deal. Any amount of money, $50, is a big deal to Warren County. And that’s why we need to get to the bottom of it to make sure it never happens again,” said Kevin Geraghty.
The payments represent about 1.5% of Warren County’s total $215 million budget for 2026.
Geraghty said he first learned of the alleged fraud only after the attempted second payment.
“I was notified on December 23rd of this year by John Taflan, the county administrator, that there was a problem, that it looks like the treasurer’s office was going to be out $3 million — they were scammed is the way it was put to me. I said, ‘OK, we need to get the proper people involved in it,’” said Geraghty.
During Tuesday’s meeting, County Treasurer Christine Norton addressed the board publicly about the scam after a vote failed to move into executive session. Norton told WAMC she felt the need to speak out because she sees her office as being unfairly targeted in the aftermath of the fraud.
“There was an ACH form that was put out there for an automated ACH without a complete workflow. So, while it came to this department it was also supposed to go the county auditor and it was also supposed to be routed to DPW. And DPW, just like with checks, whenever there is any banking information, a name, address, banking information, DPW — the department, I don’t want to pick on DPW, it has to go to the department head because they have the relationships with the vendors. Even if we called the vendor they’d be like, ‘who are you?’ They don’t know us. And that’s how it works and that’s how it’s intended to work,” said Norton.
Norton says a number of county personnel, including Geraghty and the county’s Public Works Department, received notice in July that there had been attempts to impersonate Peckham Industries to defraud other customers.
Norton says, therefore, with proper communication between county departments and officials, her office could have avoided the scam.
“And that fraud alert that they got should have alerted them. Again, I’m not saying that this department is not without a portion of the opportunity but it’s from the top to the bottom,” said Norton.
Geraghty says he never saw any notification of prior fraud.
“I didn’t know anything about this. I wasn’t told about it I hadn’t read this email until the 24th of December. And that’s why I get a bit excited because [Norton] is indicating that I had it. I didn’t have it. My secretary received something from Peckham and she didn’t share it with me — which we wouldn’t because I don’t write the bills, I don’t handle the bills here,” said Geraghty.
On Dec. 19, the Board of Supervisors passed legislation to update payment procedures, as a means to help prevent fraud.
Warren County Director of Public Affairs Don Lehman says the investigation into the fraudulent payments is ongoing.
“It’s really hard to blame a victim of a crime for being the victim of a crime. It’s like you leave your wallet in your unlocked car. Yes, it’s not the smartest thing to do but still some criminal came and took your wallet. This wallet was in your car. This money belonged to Warren County. And our treasurer’s office was duped into sending it to someone else. So, to the Sheriff’s office is investigating that criminal end of it to hold these people accountable who did this,” said Lehman.
Lehman adds in addition to a criminal investigation, the state comptroller will be looking into the incident and the Board of Supervisors has hired an outside law firm to review the county’s procedures.
“And we want to have these outside reviews look at what happened so changes can be made so we can make sure 100% that this will never happen again. And also look at how we can kind of bring everybody back together here. There’s obviously some strife between different departments, no one wants to see that. It happens everywhere and unfortunately this spilled out into the public and at that meeting. So, I think it’s going to be an uphill climb for everyone to put this behind them,” said Lehman.
The Warren County Sheriff’s Department says while its investigation is still ongoing, the department has identified a person of interest.
