3rd UPDATE, Dec. 9, 1:37 p.m.:
Paz Dominguez followed up with the Outpost to say her office did notify the two affected employees “as soon as we confirmed it was fraud. That is 100% accurate.”
The Outpost has heard from multiple sources that the county employee who fell for the paycheck scam was a recent hire working in the Human Resources Department.
2nd UPDATE, Dec. 9, 11:40 a.m.:
Another county employee contacted the Outpost Thursday morning to say she also was not “immediately notified” about her misdirected paycheck and, in fact, only got paid after she and her boss reached out to the Auditor-Controller’s Office (to no avail), the County Administrative Office and a union representative.
This employee, who also requested anonymity to avoid retribution, said the delay in getting paid got progressively more stressful as the day wore on.
“I basically had a breakdown over lunch,” she said. “Honestly, this whole payroll fiasco has made me want to terminate [my employment] with the county. Just the fact that it took numerous heads of departments to even get ahold of payroll — for me that was the hardest part, the fact that there’s so much disconnect with the Auditor-Controller.”
She was eventually paid on Friday afternoon, she said — still payday but hours later than usual.
UPDATE, Dec. 9, 10:10 a.m.:
One of the affected employees, a union member, contacted the Outpost after this post was published to dispute Paz Dominguez’s account, below. The worker, who requested anonymity due to fear of retaliation and on the advice of her union boss, said she was not “immediately notified.”
“I had to bug them for two weeks to get a check,” she said. She was told she needed to fill out a form testifying to the fraudulent activity before she could get her check, but she felt that was not her responsibility.
“This isn’t my doing,” she said. “The check should have been in my account. The fact that one of our departments fell for a fraudulent scam is their responsibility.”
The scam, she said, entailed requests to have employee paychecks diverted onto Green Dot brand prepaid Visa cards.
“They had no documentation to say how they verified this change with me, which they didn’t,” the employee said. She told the Outpost that she finally got paid Monday morning, more than two weeks after it was due, and only after notifying the Human Resources Department, the Auditor-Controller’s Office and the IT Department that she was filing a complaint with her labor union.
“They fell for a scam, essentially, and that’s not my responsibility,” she said.
A nefarious attempt to steal county employee paychecks was uncovered last week by the Auditor-Controller’s Office and Human Resources Department, and the matter has been referred to the Humboldt County Sheriff’s Office.
Details on the scam remain a bit scant, but here’s what we know: The Outpost got a confidential tip early Wednesday saying an as-yet-unidentified villain had emailed fiscal staffers in several departments. Impersonating county employees, this person claimed to have a new bank account and asked to have their bank routing numbers for direct deposits changed.
In other words, the alleged scammer was trying to divert employee paychecks into his or her own account, and apparently it worked well enough to reroute at least one or two payments — so we heard, at any rate.
We reached out to Auditor-Controller Karen Paz Dominguez and Deputy County Administrative Officer Sean Quincey for more information. Paz Dominguez responded via email:
Regarding direct deposit fraud –
On Friday, 12/3/2021, the A-C Office, in collaboration with the Human Resources department, identified and confirmed a small number of fraud instances related to employee direct deposits. The matter has been referred to County IT as well as the Sheriff department for further investigation.
The affected employees were immediately notified, made whole, and had their profiles corrected. The fraud was identified and confirmed rather quickly and we will continue examining and strengthening the County’s internal controls related to the safekeeping of public funds.
A claim has been filed with US Bank to have the funds returned to the County. As it is now an open investigation, I am not able to provide further comment.
Quincey told the Outpost that the county is actively investigating the matter.
“It’s definitely something we’re taking seriously,” he said. “It rose to that level where law enforcement needed to be brought in.”
We’ve reached out to the Sheriff’s Office for more information but have yet to hear back.
This marks the second payroll-related kerfuffle in less than three weeks. As previously reported, some sort of systems error wreaked havoc on the county’s Nov. 19 payroll, causing most employee paychecks to be delayed. The autopsy on that disaster hasn’t been fully completed, though Paz Dominguez said the error proved difficult to fix due to “a series of unfortunate events,” including a time-sensitive software “hotfix” and some inter-departmental miscommunication related to the payroll function’s migration from the Human Resources Department to the Auditor-Controller’s Office.