Inspector general releases report outlining 2019 vendor impostor fraud incident

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Nassau County Finance Committee Chairman Howard Kopel said he was concerned about Comptroller Jack Schnirman's ability to protect taxpayer money on Monday. (Photo courtesy of the majority legislature)

A report from Nassau County Inspector General Jodi Franzese revealed that the county lost more than $700,000, before recovering it, in a 2019 vendor fraud incident targeting the office of Nassau Comptroller Jack Schnirman.

Nassau County Finance Committee Chairman Howard Kopel, a Republican who is the legislator for Nassau’s 7th District and deputy presiding officer, sent a letter to Franzese in January outlining an incident in which Schnirman’s office fell victim to an online presence impersonating a county vendor.

Franzese then investigated the incident. Her findings, published in a 65-page document dated Nov. 19, showed that the online user posing as a county vendor had sought 11 payments totaling $2,095,813.92.  

Franzese said that a bank the county used froze the scammer’s account after more than $710,000 was sent.  This prevented the outstanding $1.3 million from transferring to the scammer, despite the comptroller’s office already approving the transaction, she said.  The money transferred to the online account was later recovered and returned to the county, officials said.

The scammer has not been identified and no arrests have been reported.

Brett Spielberg, a spokesman for the comptroller’s office, said the legislative majority politicized the incident despite Franzese finding “nothing new” in her investigation.

“The Republican Legislative Majority is here to score political points in an attempt to politicize an attack on our County,” he said. “The Inspector General review found nothing new that the Comptroller’s Office didn’t already transparently put forward almost a year ago.”

Franzese said she was disappointed in that response after a “very fair, balanced and impartial report” of the incident.

“We acknowledge that the review might have placed the Comptroller’s Office, an office that conducts its own reviews and audits of other entities, in an unaccustomed and perhaps unsettling position,” Franzese said in response to the statement. 

According to a news release sent out by the county’s Republican legislative majority on Monday, Schnirman, a Democrat, told officials from the Finance Committee that a bank employee recognized the unusual activity and froze the accounts, later contacting Schnirman’s office to notify him.

Franzese confirmed the scam “did not constitute a technological cyber-attack” against the county, which holds sensitive information about county residents.

Kopel expressed concerns about Schnirman’s “ability to protect taxpayer money” and thanked Franzese for conducting the investigation.

“After reading the report from the Inspector General, I am deeply concerned by the Comptroller’s behavior, and question his ability to protect taxpayer money,” Kopel said Monday. “Unfortunately, this is just the most recent example of Comptroller Schnirman showing a complete lack of respect for taxpayer dollars. I am thankful for the Independent Inspector General, and my fellow members of the Finance Committee for providing the oversight residents deserve, and I look forward to continuing to monitor the office to make sure taxpayer’s hard-earned money is protected.”

But Spielberg questioned the “independence” of the investigation Franzese’s office conducted.

“The largest question that this review raises is the structural independence – or lack thereof – of the Inspector General’s Office who is appointed by, who reports to, and who is forbidden from investigating the Legislature,” he said. “Warping a tool of reform into a political weapon isn’t oversight, it’s a waste of tax dollars.”

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