Sheriff says $2.1M in fraudulent ACH transfers hit Warren County; board hires outside counsel and approves $25,000 appropriation

Sheriff Jim LaFarr told the Warren County Board of Supervisors that his office, working with the New York State Police and the U.S. Secret Service, is investigating what he described as a basic but consequential fraud on the county’s treasurer’s office involving fraudulent ACH vendor accounts.

LaFarr said he was notified on Dec. 23 and that investigators immediately began work; he reported investigators have recovered about $1.2 million and have identified a person of interest as work continues to locate remaining funds. LaFarr described how a caller claiming to represent Peckham Materials Corporation requested an ACH vendor account that was established with fraudulent information and used to process payments. He said there is no reason yet to believe Peckham Materials Corporation itself is complicit.

Treasurer Christine Norton, who addressed the board publicly, disputed some of the sheriff’s characterizations of events and asked that an independent, third-party investigation be conducted rather than one run by the county chair or county administrator. Norton said her office discovered the fraud on Dec. 23, followed bank-recommended protocols including contacting Arrow Bank and filing an FBI IC3 report, and sought legal counsel because of ongoing sensitivities.

The board debated entering an executive session for a private briefing but a motion to do so failed on a roll call. After discussion about the appropriate mix of criminal, comptroller and independent review, the board voted to authorize the county attorney’s office to contract with the law firm Bond, Schenick and King, LLC to provide legal advice and to conduct an internal review related to the phishing/ACH scheme. The initial appropriation and contingency transfer authorized by the board was $25,000; the contract was described in the motion as a term beginning Jan. 1, 2026, under an hourly rate not to exceed $325 per hour.

County counsel advised the board that he has not uncovered prior board authorization specifically allowing the treasurer’s office to make the vendor ACH payments at issue for that vendor and said the question of pre-policy authority will be part of the investigations. Supervisors said they expect multiple parallel inquiries — a criminal investigation by the sheriff, an examination by the State Comptroller’s office, and the independent internal review — and several supervisors urged waiting for the combined findings before making broader policy changes.

Board members also asked about insurance; county counsel said a cyber-liability insurance claim has been filed but industry-standard limits (noted at $250,000 in the meeting) will be insufficient to cover the total loss and that the carrier’s review will be another investigatory step.

Next steps recorded during the meeting: the sheriff’s investigators will continue the criminal probe, the State Comptroller will perform a review, and the outside firm contracted by the county attorney will conduct a separate internal investigation and provide legal advice and potential policy recommendations to the county attorney and board.