Noosa Council has been the victim of a major fraud, losing $1.9-million dollars to an international crime syndicate.
Council CEO, Larry Sengstock, said the international criminal gangs took the money during the 2024 Christmas period.
“I want to emphasise that this fraud was not related to cyber security, Council systems were not breached or affected, no data was stolen and there was no impact to the public or our services,” Mr Sengstock said.
“This has been confirmed by external forensic IT experts engaged by Council to ensure ratepayers were protected.
“The criminals used social engineering AI techniques and we will not go into specifics to avoid revealing their tactics of the criminals, and because of our legal obligation to protect council staff.
“However, we can reveal that the fraudulent activity was sophisticated, strategic, and targeted.
“We can also confirm that no Council staff were at fault or involved in the criminal activities.”
Mr Sengstock said once they were alerted to the fraud, Council established its incident crisis response team and immediately reviewed operating procedures to ensure that processes were improved, and any risk of future fraud was minimised.
“We have been unable to bring this to public attention until now, as when police initially alerted us to the fraud, they directed us not to publicly disclose any information so as not to compromise their ongoing investigation,” Mr Sengstock said.
“While we couldn’t go public, Council did report the incident to Queensland Audit Office and relevant Ministers, in line with our statutory local government requirements.”
Council managed to recover some of the money but still lost $1.9 million.
The international criminals were already under investigation and were being tracked by the Australian Federal Police, Interpol and Queensland Police.
“Council takes its financial responsibility very seriously and on behalf of management I am sorry that this has happened.,” Mr Sengstock said.
“This incident also serves as a warning to other councils and local businesses to be on their guard, and to continually review processes around all financial procedures.
“Unfortunately, as we are seeing every day in the media, scams and frauds are on the rise, and many companies and organisations are being targeted.
“While we are very disappointed this has happened and are doing all in our power to ensure we minimise the risk as much as possible, so this doesn’t happen again, we are thankful that in this instance no one in our community was directly affected and there was no impact on Council’s operational functions or projects,” Mr Sengstock said.
The investigation is continuing.
