The government of Puerto Rico, suffering through a debt crisis and strapped for cash after enduring two major natural disasters, reportedly lost more than $2 million in an email phishing scam directed at one of its finance directors, according to the Associated Press.
“Puerto Rico’s government has lost more than $2.6 million after falling for an email phishing scam,” the AP reported, citing an unnamed government official. “The finance director of the island’s Industrial Development Company, Rubén Rivera, said in a complaint filed to police Wednesday that the agency sent the money to a fraudulent account.”
The island’s “Industrial Development” agency received an email from an account purporting to manage remittance payments. The government apparently transferred $2.6 million directly into the fake account, then realized what they’d done and informed the FBI.
“It’s still unclear how officials discovered the scam, if anyone has been dismissed or if the agency’s operations have been affected because of the missing funds,” tech news site, Engaget, added. The FBI is reportedly trying to help the struggling island recover the much-needed money, though it’s not clear how successful those efforts will be.
This is also the second such incident in two months. NBC News reported that the island’s “Tourism Company sent $1.5 million in January to fraudulent accounts on the U.S. mainland.”
The news comes amid reports that the Government Accountability Office (GAO) is demanding better financial oversight in Puerto Rico, and major anti-corruption measures, targeting the island’s government officials who have an intense reputation for fiscal mismanagement.
“As of September 30, 2019, FEMA had obligated nearly $6 billion in Public Assistance grants to Puerto Rico for 1,558 projects since the September 2017 hurricanes. Of this $6 billion, $5.1 billion was obligated for emergency work projects such as debris removal and temporary power restoration,” according to Homeland Security Today, but much of that money is still in limbo, waiting for authorities to provide fixed plans for spending the money as well as guarantees that the money will be spent in ways that directly benefit those affected by both 2017’s Hurricane Maria and a series of earthquakes that rocked the island in December of 2019.
Those twin disasters caused more than $90 million in damages, and paired with a debt burden of $70 million, created by “years of local-government fiscal mismanagement” and “a culture of government officials making promises they couldn’t afford,” per the New York Post, the island is now hopelessly impoverished.
“The government of Puerto Rico is in a serious fiscal crisis. It doesn’t have enough money to fulfill its obligations,” said Puerto Rico Rep. Ramón Luis Cruz who demanded, in legislation filed this week, that the government launch an in-depth investigation into how more than $4 million, total, went missing. “It’s truly absurd and unsustainable to have such a shallow and vague explanation.”
The island territory’s problems go even deeper, though, than its central government. Local officials, embroiled in a culture of corruption, have ground recovery efforts to a halt, often just miles from where they’re most needed.
Last month, residents of Ponce, a city ravaged by the December earthquakes, discovered a warehouse packed to the rafters with bottled water, non-perishable food, diapers and baby supplies, and first aid items delivered back in 2017, after Hurricane Maria, and apparently left to rot by local officials who refused to simply hand out the supplies to those who needed them.
Last week, the Trump Administration appointed a Puerto Rico “recovery czar” who will, hopefully, speed along the process by providing responsible oversight.