Cleveland Public Library scammed out of $400,000
The Cleveland Public Library was defrauded of nearly $400,000 in a payment redirect scam, according to Ohio State Auditor Keith Faber. The library transferred funds to a fake vendor after failing to implement proper internal controls that would have detected the fraudulent activity. Although a bulletin had been issued more than a year prior, instructing public offices on handling payment redirect requests, the library did not follow these guidelines. After the incident, the library immediately improved its vendor verification processes to prevent future scams.
Insurance covered $350,000 of the loss, and the legitimate vendor forgave $46,405, enabling the library to recover the full amount. Additionally, $133,849 was recovered from the fraudulent bank account and returned to the insurer. The majority of the library’s budget comes from taxpayer funds, including important contributions from the ohio Public library Fund and property tax levies. However,the state’s new budget will cut overall library funding,resulting in a projected $2 million loss for the Cleveland Public Library in 2026 and 2027.
Cleveland Public Library scammed out of $400,000
(The Center Square) – The Cleveland Public Library transferred almost $400,000 to a fake vendor as part of a payment redirect scam, State Auditor Keith Faber said Tuesday.
Faber said the library failed to adopt proper internal controls that would have detected the scheme.
More than a year ago, Faber issued a bulletin to all public offices on handling payment redirect requests. According to state auditors, the Cleveland Public Library did not follow the controls established in that bulletin.
Immediately following the incident, the library changed its controls.
“The library did not have a proper internal control process in place to detect fictitious vendors,” auditors wrote. “We did note that the library immediately implemented multiple vendor verification measures to prevent future business email compromise schemes.”
Auditors said the library changed bank payment information after getting a request from someone pretending to be a legitimate vendor.
Insurance covered $350,000 of the nearly $400,000 scammed, and the legitimate vendor forgave $46,405, allowing the library to recoup the entire lost amount.
Another $133,849 was recovered from the fraudulent bank account and repaid to the insurance company.
The bulk of the library’s funds comes from taxpayers. It’s 2026 funding request included 40% from the Ohio Public Library Fund.
The state’s new budget cut overall library funding, which would mean a $2 million loss for the Cleveland Public Library in 2026 and 2027.
Also, the library receives $43.5 million of its $83 million budget from property tax levies.
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