The Garden City Park Water and Fire District has filed a lawsuit against the First National Bank of Long Island for allowing the theft of more than $15 million in funds from the district’s account.
The district sent a letter to its residents on Tuesday, Jan. 21, and posted a statement to its website on Thursday, Jan. 23, reporting the lawsuit. The initial court documents are dated from Jan. 17 and the suit was filed in New York State Supreme Court.
The district assured residents that the theft did not impact the district’s operating funds or ability to serve the community, that no personal information was stolen, and that no change in the district’s tax rates is expected.
The district also said that the stolen funds were in an account dedicated to prospective capital projects. The Garden City Park Water and Fire District represents parts of Garden City Park, Manhasset Hills, New Hyde Park, Mineola, North Hills, Roslyn, Williston Park, Albertson and Garden City.
The district reported that it was able to recover $4.45 million of the funds with the help of law enforcement but is currently seeking roughly $11 million that is still outstanding through the lawsuit. The court document states that the district’s $15.55 million that was reportedly stolen represented roughly 85% of its total deposits with the bank. The incidents occurred on July 12 and 15 2024.
First National Bank of Long Island released a statement stating that it immediately contacted law enforcement after noticing the transfer activity, acted reasonably and intended to continue its work to recover lost funds.
“The Bank’s investigation did not yield evidence of unauthorized Bank network activity,” the bank said. “Further, the Bank believes that it followed its reasonable procedures regarding online wire transfers.”
The district is demanding the bank to make good for the $11,098,996.77, plus interest, calculated as of the date of the unauthorized transfers, plus the cost of damages and legal fees in the lawsuit.
The court documents state that the bank enabled one or more online scammers to perpetrate a massive cyber-fraud against the district’s bank accounts beginning on July 12.
Unauthorized changes were then made to the account, and 15 wire transfers were reportedly initiated on July 15, according to the lawsuit. According to the documents, funds were sent to banks in China, Mexico, and throughout the United States.
The lawsuit also states that 10 of the 15 fraudulent online payment orders exceeded the bank’s per-wire limit of $700,000, which exceeded the bank’s daily dollar limit of $2 million.
“What happened to the District is every bank customer’s nightmare,” lead attorney for thedDistrict in the litigation, Jon Ward of Sahn Ward Braff Coschignano, said in a 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.”
According to its statement, the Garden City Park Water and Fire District is now partnered with another bank.
