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Category: Public/Legal Notices/Resolutions
FOR IMMEDIATE RELEASE—January 21, 2025
Contact: Jon Schneider, (631) 897-5439
j.schneider@mcbrideny.com
GARDEN CITY PARK WATER/FIRE DISTRICT FILES SUIT AGAINST FIRST NATIONAL BANK OF LONG ISLAND TO RECOVER $11M+ IN STOLEN FUNDS
Suit Details How Bank’s Negligence and Failure to Follow Established Procedures Allowed Cyber-Criminals to Steal $15M+ From District’s Accounts
Mineola, NY—Today the Garden City Park Water/Fire District (District) filed suit in New York State Supreme Court against First National Bank of Long Island for allowing the theft of more than $15 million in funds from the District’s accounts. After the District was able to recover some funds with the help of law enforcement, there is currently approximately $11 million outstanding which is being sought through this action.
This lawsuit follows the District’s extensive efforts to recover the stolen funds, including working with federal and local law enforcement. Unfortunately, these efforts have not resulted in the recovery of the full amount of the District’s stolen funds.
“As the complaint outlines, First National Bank of Long Island’s failures allowed cybercriminals to steal more than $15 million from the District,” the Garden City Park Water/Fire District Commissioners said in a statement. “As fiscally responsible stewards, we are undertaking this legal action because the District should not suffer for the Bank’s failures and incompetence. We will continue to do everything possible to fight for our residents and hold responsible parties accountable. Because we are now in a legal process, we will refer all future comments to counsel.”
“What happened to the District is every bank customer’s nightmare,” lead attorney for the District in the litigation, Jon Ward, Co-Managing Member, Sahn Ward Braff Coschignano, said. “The District relied on their bank to protect the security and integrity of its deposits, and First National Bank of Long Island failed. Now, we are asking the Court to hold First National Bank of Long Island accountable for its failure.”
As the filing outlines, cybercriminals, impersonating District personnel, contacted First National Bank of Long Island and convinced the Bank to make a number of unauthorized changes to the District’s account settings, including allowing online international and domestic wire transfers, services never previously requested or used by the District. They also convinced the Bank to provide them with confidential login information, or the means to create such information, that then enabled them to access the District’s bank accounts to initiate wire transfers.
The next business day, the cybercriminals logged in to District’s banks accounts and initiated and authorized 15 wire transfers, totaling more than $15 million, including over $12 million sent to banks in China, within a span of just four hours. Despite numerous irregularities and red flags, including exceedances of the Bank’s own limits on wire transfers by a customer, the Bank processed each of the unauthorized transfers.
Upon discovering the fraudulent activity, the District immediately contacted the Bank and federal and local law enforcement authorities. As a result, over $4.4 million of the stolen funds were recovered. The District continues to work with law enforcement to track the remaining funds. In addition, the District has moved its banking relationship to a different banking institution.
The lawsuit lists eight causes of actions against the Bank requesting approximately $11 million plus interest in addition to attorney’s fees and punitive damages through the lawsuit.
In a note being sent to District residents today, the District outlined several important points:
— This theft has not impacted the District’s operating funds or in any way impeded the District’s work and ability to serve the community.
— At no time was personal information of District residents compromised.
— At this time, the District does not anticipate increases in the District’s tax rate or taxes as a direct result of the fraud. The stolen funds were in an account for prospective capital projects.
— The District is also consulting with other Town, County and State agencies and representatives to keep them informed of the situation.
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The Garden City Park Water District currently meets all requirements and is no longer in need of a deferral.
PLEASE TAKE NOTICE that he Board of Commissioners of the Garden City Park Water District, in Town of North Hempstead, Nassau County, will conduct a Public Hearing on July 29, 2020 at 7:00 PM, remotely via videoconference only, with no “in person” location, pursuant to NYS Governor Cuomo’s Executive order 202.1 and 202.15 relating to the Covid-19 pandemic. The purpose of the hearing is to consider capital improvement projects to enable the Water District to meet existing and anticipated water supply demands and to meet or exceed current and proposed water quality standards, including for emerging contaminants 1,4-dioxane, PFAS and PFOA. Such projects include (i) Emerging Contaminant removal at Plant No. 6 (ii) Emerging Contaminant removal at Plant No. 7/10 (iii) Emerging Contaminant removal at Plant No. 8 (iv) Emerging Contaminant removal at Plant No. 9 (v) new portable generator for plants 6 and 8 (vi) new generator for plant 9 (vii) rehabilitation of Denton Ave. elevated storage tank (viii) water Distribution system improvements. The aggregate estimated maximum cost of the projects is $30,000,000, proposed to be financed, upon Water District petition to the Town of North Hempstead, with serial bond and bond anticipation notes in an estimated maximum principal amount of $30,000,000.
The Engineering Report prepared by Water District consulting engineers H2M Architects + Engineers with respect to the proposed projects has been posted on the Water District’s website (www.gcpwater.org).
All interested parties may attend the public hearing, but only remotely, via Webex videoconference, on July 29, 2020 at 7:00pm. The Webex meeting ID and password will be made available on the Distric’s website (www.gcpwater.org) at least 24 hours prior to the start of the public hearing. First-time users of the webex meeting app will need to download the app prior to the meeting. All persons remotely accessing the Public Hearing will have an opportunity to be heard.
Written comments and/or questions may also be submitted via email to Superintendent Michael Levy at the following email address: mlevy@gcpwater.org . Any comments and/or questions submitted via email no later than 60 minutes prior to the start of the public hearing will be considered at the public hearing.
As required under relevant Executive Orders, the hearing will be recorded and later transcribed.
Dated: July 8, 2020
Board of Fire Commissioners
Garden City Park Water/Fire District
Town of North Hempstead
Attest
Kenneth Borchers, Secretary
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