The Municipal Authority of Westmoreland County on Wednesday hired a Georgia-based company to pay its vendors.
Described as a trial run that could net the authority up to $180,000 annually in additional revenue through commissions, officials said the deal is in response to a fraud scheme that resulted in the theft of $826,000 last June.
The contract with Repay of Atlanta, which says it does similar work with 4,500 clients throughout the United States, calls for the company to process all invoices and make payments on the authority’s behalf to vendors and contractors who do business with the authority. The company will pay vendors with a “virtual credit card” and collects a 1% rebate as payment for its services.
The authority will receive half of that rebate generated through its own transactions.
“Our recent brush with a vendor impersonation scheme made us well aware of the risks of fraudulent actors who are always working in the background. With this contract we will shed much of that risk and also gain a stream of revenue from what were previously just payments, money heading out of the coffers of MAWC,” said authority business manager Brian Hohman.
The authority was targeted last June by scammers who posed as a vendor awaiting payment for work as part of the agency’s $25 million project to expand its Indian Creek water treatment plant near Connellsville. Scammers used a fake email that was similar to that of one of the authority’s contracted vendors in which it claimed it changed its banking account numbers where the money was to be paid.
The authority’s New York bank investigated the theft and was able to track the money to about 10 other financial institutions and recovered most of the funds, nearly $729,000. Insurance repaid the remaining $97,000 that wasn’t initially found.