District officials: Criminals intercept payment of more than $840K made by West Allis-West Milwaukee School District

WEST ALLIS, Wis. (CBS 58) -- The West Allis-West Milwaukee School District has filed a police report after an online payment of $843,254.94 was not received by the intended company. 

According to the district, the transfer was one of the scheduled amounts due to CG Schmidt, as the general contractor for the new West Allis-West Milwaukee School District Recreation and Community Services Center being constructed at 68th and Arthur Avenue.

According to court documents, it all started in September when a district employee received an email from someone saying they were from CG Schmidt. The email address was fake. The person emailing told the district employee there was an update to their new banking information and they requested the district employee send them a blank copy of the district's ACH form, which gives someone the ability to take money from a bank when a payment is due. 

The district employee sent the form and it was returned with the same routing number, but a different bank account number. 

In October, CG Schmidt sent the West Allis - West Milwaukee School District an invoice for $843,254.94. The district employee made the full amount to the changed account number, according to the court documents. 

CG Schmidt later contacted the district saying they had not received a payment. 

According to the West Allis Police Department, their initial investigation led them to different spots around the country and additional follow-up indicates the money was likely transferred overseas. The case was turned over to the FBI in mid-February. 

"We do not expect this to impact the construction of our new Recreation and Community Services Center," said Caitlin Windler, director of finance and operations at West Allis-West Milwaukee School District. "We've also implemented procedural changes to address our online banking process and will provide user education and training for email fraud and phishing attacks."

The district is exploring "all possible avenues of recovery" of the stolen funds, according to Superintendent Dr. Marty Lexmond.

In a statement, Dan Davis, senior vice president at CG Schmidt, told CBS 58: "The West Allis-West Milwaukee School District was the victim of fraud, resulting in the loss of a payment the District had intended to send to its contractor CG Schmidt in fall 2019. The payment was intercepted by criminal actors separate and unrelated to CG Schmidt and its secure online payment system and process. We support the district as it works with law enforcement authorities to address the matter and hopefully identify those behind the fraud and bring them to justice."