Listen to this articleThe Garden City Park Water/Fire District filed suit in New York State Supreme Court Wednesday against First National Bank of Long Island for allowing the theft of more than $15 million in funds from the district’s accounts.
The lawsuit stems from a July 2024 cyber-crime in which hackers impersonated district personnel and convinced the bank to make unauthorized changes to the district’s account settings, including allowing online international and domestic wire transfers, services never previously requested or used by the district, according to the complaint. The cybercriminals also convinced the bank to provide them with confidential login information, or the means to create such information, that then enabled them to access the district’s bank accounts to initiate wire transfers.
The next day, the cybercriminals logged into district bank accounts and authorized 15 wire transfers totaling more than $15 million, including more than $12 million sent to banks in China within four hours, according to the complaint. The lawsuit claims that despite numerous irregularities and red flags, including exceeding the bank’s own limits on wire transfers by customers, the bank processed each of the unauthorized transfers.
“As the complaint outlines, First National Bank of Long Island’s failures allowed cybercriminals to steal more than $15 million from the district,” the Garden City Park Water/Fire District commissioners said in a statement. “As fiscally responsible stewards, we are undertaking this legal action because the district should not suffer for the bank’s failures and incompetence. We will continue to do everything possible to fight for our residents and hold responsible parties accountable. Because we are now in a legal process, we will refer all future comments to counsel.”
Bank officials were unable to be reached for comment on the litigation.
Though the district, with help from law enforcement, was able to recover $4.4 million of the stolen funds, the lawsuit is seeking about $11 million still outstanding, as well as court costs and punitive damages.
“What happened to the district is every bank customer’s nightmare,” attorney Jon Ward, co-managing member of Sahn Ward Braff Coschignano, who is representing the district in the lawsuit, said in the statement. “The district relied on their bank to protect the security and integrity of its deposits, and First National Bank of Long Island failed. Now, we are asking the court to hold First National Bank of Long Island accountable for its failure.”
In a message sent to residents in the Garden City Park Water and Fire District, officials said the theft has not impacted the district’s operating funds or impeded its work and residents’ personal information was not compromised.
The district does not anticipate increases in taxes as a direct result of the fraud, since the stolen funds were in an account for prospective capital projects.