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Cabarrus Magazine

Latest Episode of "Up Front" Takes a Look at Cabarrus County Scam

Aug 08, 2019 02:57PM ● By Jason Huddle
Below is a full transcript of the episode, or click the link to listen as well!

Huddle: (00:00)
Just ahead on up front with Cabarrus Magazine. "If somebody had happened to pick up the phone and call this firm and say, Hey, is this correct? This whole thing might have been avoided." "I think that that is entirely possible." We talked to county commissioner Steve Morris about the recent scandal regarding the county losing over two and a half million dollars of taxpayer money to scam artists. He opens up in a very candid interview. We'll also give you some important tips on how to avoid being a scam victim yourself. Coming up next on Up Front with Cabarrus Magazine, sponsored by Atlantic Bay mortgage, CERTEC Automotive Code Ninjas, Concord Downtown Development Corporation, Family Wealth Partners, Merle Norman Cosmetics and Edie's Salon and Your CBD store of Concord. I'm your host Jason Huddle.

Speaker 2: (00:53)
[inaudible].

Huddle: (00:59)
Welcome to episode 23 of Upfront with Cabarrus Magazine. Can you believe we're 23 episodes in? We've had a lot of great interviews so far with very high profile guests like congressman Richard Hudson. Last week we had Mick Mixon from the Carolina Panthers and that was a blast. We had a great time down in Spartanburg with those guys, but today we have to turn more serious and get into the recent scandal that is the Cabarrus county government losing two and a half million dollars to scam artists. I reached out to county commissioner, Steve Morris. He was gracious enough to give us some time, so I went out to the governmental building and interviewed him, and you're going to hear the product of that today. I'm also looking forward to at the end of the program, giving you some tips on how to avoid being a scam victim yourself. It's easy for us to sit here and criticize the county and say, how could you let this happen? But the truth of the matter is, this happens to individuals every day. I know that probably multiple times a day you receive and I receive different emails or phone calls trying to trick you into giving up information or even giving money away and we're going to help you learn to avoid all that. But first, of course, it's shameless plug time.

Huddle: (02:22)
I know it's still August, but believe it or not, the Carolina Renaissance Festival is right around the corner and your friends at Cabarrus magazine are here to help you get in the door. Tickets are $26 but I can help you get in for free. Here's what you have to do. You have to go to Facebook, join the Upfront with Cabarrus Magazine podcast group and stay tuned. We will be having a contest very shortly to win family four packs and pairs of tickets to the Carolina Renaissance Festival for 2019 so make sure you jump on Facebook. Join the podcast group where you can join in discussions regarding the topics we've talked about, even communicate with some of our guests and of course get an advanced listen on each week's episode and of course win free stuff. So jump on Facebook, join the podcast and win Carolina Renaissance Festival tickets, courtesy of your friends here at Cabarrus Magazine. And that's this week's shameless plug.

Huddle: (03:28)
Our interview with County Commissioner Steve Morris, coming right up after a couple messages from our sponsors. Stay tuned,

Commercials: (04:37)


Huddle: (04:49)
Welcome once again to Upfront with Cabarrus Magazine. I am joined today by County Commissioner Steve Morris, and he has graciously agreed to come onto the podcast in light of the events, uh, that were announced last week regarding the county. Unfortunately losing over $2 million of tax payer funds, uh, to imposters representing themselves as, um, representatives of a construction firm and they basically swindled the county out of the money. First of all, Commissioner Morris, thank you so much for, for coming on today.

Steve Morris: (05:31)
My pleasure, Jason. Glad to, glad to talk with you.

(05:34)
So let's, let's talk about how this happened. First of all, obviously I'm sure there are lots of protocols and things that you have to go through. Uh, I know I've done business with the county and so I've had to go through protocols in order to to get paid, right? So how does this happen where somebody basically cons the county out of two and a half million dollars?

(05:59)
Yeah, it's pretty sophisticated process. I think initially these folks contacted the school system through an email. The school system directed them to the county, telling them that the county makes all these payments. And of course they represented themselves as being, um, with this construction firm that's constructing the new West Cabarrus high school. Uh, those folks subsequently contacted the county, um, told them that they need to make some, make changes to their banking information. And of course you gotta understand, I'm telling all of this to you the way I understand it, which hopefully is accurate, but, um, then the county gave them instructions as to what forms would have to be filled out, what signatures would have to be received and those sorts of things in order to make any kind of a change. Um, they responded with those documents, uh, signed, um, by, uh, or represented themselves to be, um, principles of that firm. The names were all correct. The letterhead was all correct. The,

Huddle: (07:16)
so these guys had done their homework.

(07:18)
Oh, absolutely. And, and the emails that came came from an address that, uh, appeared to be of a domain of that company. And so this was not a, this was not a bunch of high school kids playing around. This is a very sophisticated, well thought out scam that unfortunately was not caught.

Huddle: (07:41)
Was it not caught because we simply rely too much on digital communication and no one talks on the phone anymore? I mean, if somebody had, and I'm not pointing fingers, but I'm saying if somebody had happened to pick up the phone and call this firm and say, Hey, is this correct? This whole thing might have been avoided.

(08:03)
I think that that is entirely possible and unfortunately in policies and procedures and protocol used by the county, that step was not one of those that had to be checked off the list and very possibly had that happen. You may be correct. That may have averted it or even had there been something questionable about the information that they provided that would have caused an employee to pick up the phone and say, you know, you fail to fill out this section or you failed to give us this information. You know, any little item like that would have potentially caught something. Unfortunately, they were so meticulous in the way that they filled out the documentations and signed. And so, uh, that did not occur. But you are correct that, that, that could have averted the problem.

Huddle: (09:01)
So do we have any leads on who this was or any chance of catching them?

Morris: (09:08)
Well, to the best of my knowledge, no. There have been extensive investigations and those are ongoing. Of course, we started out with local law enforcement with our sheriff's department. Uh, they called in the FBI, which took the case and they have worked at, since that time, the amount of funds that have already been recovered, uh, were a result of that investigation between the several banks that were involved and the FBI and the sheriff's department. And so they're, it's entirely possible that they may have additional information that they could offer, but at this point that has not been shared with us or the things that have been shared with us. Uh, we have not been given permission to release, which obviously we do not want to in any way, uh, impede the investigation, uh, as they continued to try to, uh, to see if more phones can be recovered.

Huddle: (10:15)
It's about $800,000 that's been recovered at this point. Is that,

(10:18)
I think it's actually 700 and some odd thousand close to 800,000.

(10:25)
Okay, so 800,000. How did we, how do we get that back? I mean, I know you said you coordinated with some banks, but how do you only get part of it back? I'm trying to wrap my head around that.

Morris: (10:34)
When our bank contacted the bank that the funds had been transferred to. Uh, at that point in time there was still, if I understand correctly, some funds remaining in that account. So they immediately froze those funds. Then there were some funds and the funds had been sent out many, many different directions and so I think they traced down each one of those leads and they were able to locate sure. One or two of those and freeze those funds. Sure. A and before they call us that. Right? Right. It's all the other fingers of, of where it went that that still remain

Huddle: (11:23)
The unfortunate catch 22 in an operation like this is once you freeze the primary account where these funds were transferred, you signal that, okay, we're on to you and so they're going to start clearing all the other accounts

(11:36)
I feel very sure that that is true. Yes.

Huddle: (11:39)
Yeah.

Huddle: (11:40)
Keep listening to hear the rest of my interview with County Commissioner Steve Morris. Right after these messages,

Commercials: (11:45)


Huddle: (12:30)
We now return to our interview with County Commissioner Steve Morris.

Huddle: (13:42)
So Cabarrus County isn't the only county this has happened to. This is apparently a pretty sophisticated but not entirely rare operation that has happened to other municipalities.

(13:54)
Becoming more that way. Now. I think some of the examples that that I have heard have been with the university system and some similar construct, large construction projects, um, that, that has occurred with at least two of those that I'm aware of as I tell somebody the other day that was asking questions about it. Um, when something like this happens to you, most people don't like to talk about it because it is embarrassing.

Huddle: (14:27)
Sure.

(14:27)
Um, and that is unfortunate because the more people talk about this and the greater awareness that's created about these kinds of schemes. Uh, and, and I hope that's one thing that, that, that comes from us talking about it, is that perhaps it sends out some red flags for other folks. Could this happen to us and what steps can we take to prevent this from happening to us? And of course that's, that's the action that we have taken is we've hired a, an accounts payable professional that has come in as a consultant that has looked over all of our policies and procedures, has recommended changes where she identified potential weak points, has, um, spent training time with employees as to the appropriate way to handle these kinds of situations. So we feel like we're in much better shape now. But as a financial professional said to me last week, you don't know what the next scheme's gonna be because, because these folks continue

Huddle: (15:39)
As we eevolve, so do they, right? Just like counterfeiters.

Morris: (15:42)
Right, exactly.

Huddle: (15:43)
Right. Quick question. I have some friends in the tax office who have told me they have received calls stating that the reason for the property tax increase is because of this whole fiasco. Can you put that rumor to rest?

Morris: (16:01)
Yeah, that is, that is not true. Uh, the recent tax increase is to cover the ongoing continuing construction projects that, that we are involved with most specifically with our county school system. Um, you know, we have to,

Huddle: (16:21)
This is what this money was for. Right?

Morris: (16:22)
Exactly, exactly. That was part of it. Fortunately for us, we have an emergency contingency fund where we have some funds set aside in our reserves to cover emergency situations like this. Um, and, and that, um, yeah, it doesn't hurt any less, uh, to have to, to use that because those are tax payer dollars as well. Um, but on the bright side for us, there are many, many smaller counties throughout the state, um, that if they experienced a loss of this magnitude, it would have a tremendously negative impact on their, uh, financial ratings, their bond ratings, their ability to finance projects, things of that nature. And because of good planning on the part of the county over a number of years, we were not caught in that awkward of a position that we could have been. That doesn't make the loss any less painful. Sure. And any less distressing, but at least we do have those, those funds to cover it. But yeah, the, the tax increases that are tax payers have experienced here in Cabarrus county and we tried to be as transparent as possible during our budgeting process and talking about that or the the needs of the school system in to the need to build a new county court house, which, which is going to be a huge expense for the county. That's something that we - it's not an optional thing, we're not doing that because we want a nicer building or a prettier building is because we're absolutely bursting at the seams and the current facility and those are one of those services that we are mandated to provide and that's facilities for the courts, offices for the probation officers and so forth. All of those things involved with the justice system. Sure. So that, that, that's our, that those are our big issues spending wise.

Huddle: (18:35)
Well, hopefully, uh, we can avoid this in the future. I'm sure that you guys who are reviewing your policies and, and, uh, making sure that you're going to implement plans in order to, you know, maybe even just put in a - slide in a, hey, give them a phone call.

Morris: (18:49)
Right, right. I feel sure that that probably has long been in place by this time. Now I think, um, um, I, and I said this at our meeting when we announced this last week, I said, I think a fair question that people might ask is if this started in November and December and you learned about it in January, why are we just now hearing about,

Huddle: (19:17)
That's a valid question.

Morris: (19:18)
Yeah. And the answer to that question is because of the ongoing investigation. This is the earliest that we have been received a release from law enforcement agencies to talk about it because I think once the board became aware of it early in this year, uh, that was probably one of the first questions that was asked when and how can we talk to the public about this? Because I don't think any of us are interested in being in a situation where it might appear that we're withholding information, uh, from, from the citizens of Compares County. And so that question has been asked a couple of times since then, but that, that is the reason for it. And, uh, that has been, um, something that has, has been and remains extremely important to, to this, this board of commissioners is transparency. Um, you know, if they're, we, we want folks to know everything they're willing to listen to. And so we thank you for helping to share some of this information.

Huddle: (20:30)
Absolutely. Uh, Steve Morris, County commissioner, thank you so much for coming on the program today. Thank you for your uh, willingness to be as candid as you were and we certainly wish you the best moving forward and we know that you guys are going to be good stewards of our money from here on out.

Morris: (20:48)
Thank you. It's been a pleasure talking to you.

Huddle: (20:50)
All right, we'll be back in just a moment.

Commercials: (20:52)


Huddle: (20:52)
We certainly appreciate Commissioner Morris coming onto the program and talking about this very delicate situation that the county has been dealing with since the beginning of the year. But I wanted to also bring this home to you because like I said at the beginning of the program, this happens to people every day. Just everyday people, people get scammed out of money or they get tricked into giving up information. So I did a little research and here's some tips from the Federal Trade Commission on how you can avoid becoming a scam victim. First of all, learn how to spot your imposters. Scammers are often going to pretend to be someone you would normally trust, like a government official or a family member or a charity or even a local company. I know that the magazine is actually been, um, a victim of someone representing themselves as being with our magazine, trying to sell advertising to clients and they were not representing us. But, uh, fortunately we had some savvy clients that called our magazine up and, and asked if this person was with us and we told them no, of course. And we're able to, uh, prevent anyone from getting scammed. Secondly, do some research, do some online searches, check out the company they're representing and see if there are any reviews or complaints or the word scam is attached to it. I know that we're all familiar with the IRS scam. You know, I've gotten that call myself. All the IRS is coming to arrest you right now if you don't pay us. We've all gotten that call. But unfortunately some people do fall for it still or they wouldn't keep trying it. So do a little research and you could find that the company that they're representing is not legitimate. Uh, you can even research phone numbers. So copy the phone number that you're receiving a call from Google it and you might even find that it is linked to scams. Don't believe your caller id. How many times have you gotten a call from what you thought was a local person, local entity only for it to be a completely different person or a scam. I know my wife has even gotten calls from herself, which is really weird. I don't even know how they do that. So don't believe your caller id. Uh, technology certainly makes it easy for scammers to fake caller ID information. So the name and number that you see is not always real. So do not trust that as a means of deciding whether that person is genuine or not. Of course, don't pay up front for a promise. We've all heard this before. If you've one quote unquote a contest, but the deal is you have to send in money to in order to receive money, chances are it's a scam. So do not do that. Also consider how you pay a credit cards. Have a lot of fraud protection built in, so if you do pay for something that is a scam, you're usually protected with most credit card payments. If you use your debit card, that might not be the case. Certainly if somebody is claiming you owe them money and they're requesting money via at Western Union or Moneygram, no, that there is no way to get that money back once you send it via those venues and most credible institutions are not going to ask for money that way. They're going to take a credit card payment. So be aware that if they are asking for money that way or even in gift cards, realize that is not a standard way to pay a debt. So realize if they are asking for money in that way, it's highly likely they are not legitimate. Okay. Next one. Talk to someone before you give up money or personal information. Talk to somebody you know you can trust. Scammers will make sure that you try to make the decision right there and then on the spot and they're going to pressure you to do that. But you know you have the law on your side. Even the fair collections act addresses this. No one can force you to pay money you don't have. So just realize that before you make a payment, you put them on the defensive and say, look, I need to make sure this is legitimate. If you are a legitimate company, then you don't have a problem with me doing that. And if you do, then you're probably not legitimate and I really don't owe this money. So make sure that you talk to somebody you know and check out the story before you do any kind of payment. If it's a robo call, just hang up. You know, a lot of us get them all the time. I get my call from Linda from card services just about every day. A little trick that I do is just to simply block that number. Now I know that the Robo calls are just going to find a different number to get me with, but at least it works for a few weeks even where I will block that number so that it cannot reach me again and then I'll get the call from a different number a couple weeks later, but just block the number. Do not press one to speak to a person to be taken off the list. That could just lead to more calls. It's actually a trap so it's a trap, so don't do that. Just hang up on the Robo calls. Be Skeptical about free offers. Some companies will use free trials to sign you up for products and then start billing you every month for a product you didn't even want in the first place. You just wanted the Freebie and so just be very, very leery and read the fine print when it comes to signing up for trial offers and always review your monthly statements for charges that you don't recognize. Of course, don't deposit a check or wire money back. We talked about that earlier. If someone is sending you money in order to get money, I guarantee you it's a scam. So do not do that. Especially if it's somebody you don't know, just don't do it. It's not real. The check is not valid. What's going to happen is you're going to send them a bunch of money that is real and you're going to get socked for the money that isn't. So do not do that. And finally you can sign up for the free scam alerts from the FTC at ftc.gov/scams you can get the latest tips and advice about scams sent right to your inbox. So there are your tips today for how to avoid becoming a scam victim yourself. We saw it with the county, we see it with people every day. Hey, it happens, but a no judgment. Just trying to help you guys out and avoiding this in the future.

Huddle: (28:27)
After the mic turned off, I did talk to commissioner Morris just a little longer and extended the conversation. And the thing is this, one of the protocols that unfortunately worked against us was the fact that when they scammers contacted the county to get the bank routing information changed. You remember he talked about, they gave them the protocols to do that. You need this form and this form and this form. Well, under normal circumstances in our brains, we think, well, if they can't come up with those forms, then it's fail safe. Right? Well, obviously not. What they essentially did was, and Commissioner Morris agreed with this, we gave them the blueprint on how to steal the money. Well, if you want to steal the money, you're going to have to come up with this form in this form and this form, and they were able to forge those documents. It just takes a little bit of research. Everything is on the Internet now. They just had to figure out who the right people would be to sign different checks or assigned different forms and find blank forms on the Internet that they could then turn around and Photoshop to their liking it. It was sophisticated but it wasn't hard and unfortunately it costs us a lot of taxpayer dollars. No one is losing job over this and some people are upset about that. But here's the thing that people that ultimately changed the routing information did what they were asked to do. They went by the book. The problem was the protocols were wrong and that's what needs to be changed. And Commissioner Morris has assured me as he assured you on this program, they are being changed. So with that, we're going to leave it for this week, make sure you join us next week when we get back to football. This time, high school football, if you've seen our current issue, it is our first ever 2019 high school football preview. And this time we'll be going out and interviewing some of the coaches for our podcasts in the area and let them talk about their teams. And as we are closer to the season now they can give us maybe a little more insight into what to expect from their teams this year. So make sure you tune in for that next week. Of course. As always, I want to thank our sponsors, Atlantic Bay Mortgage, CERTEC Automotive, Code Ninjas, Concord Downtown Development Corporation, Family Wealth Partners, Merle Norman Cosmetics, and Edie's Salon, and Your CBD store of Concord, and of course, remember to support those that support us. Until next week, I've been your host Jason Huddle. We'll see you then.

Episode 23: How Cabarrus County Got Scammed

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