FOR IMMEDIATE RELEASE: May 22, 2025

$700,000 ACH scam warrants further investigation by state’s top law enforcement official

PHILADELPHIA – Today, City Controller Christy Brady reported that her office has submitted findings concerning a cyber fraud scheme—totaling close to $700,000 at the School District of Philadelphia—to the Pennsylvania Office of Attorney General for further review.

The City Controller was informed of the alleged Automated Clearing House (ACH) fraud incidents involving payments made by the school district to individuals or entities posing as vendors. There were at least four instances of electronic payment transfers last year that were diverted by malicious actors, resulting in the vendors not receiving the funds.

According to Brady, it appears the bad actors gained unauthorized access to the school district’s banking data or manipulated existing payment systems to send unauthorized funds to their own accounts.

“This is an urgent matter that warrants an investigation by the state’s top law enforcement official to determine the extent of the fraud and to take any action that is deemed appropriate,” said Brady. “At present, financial records indicate that the payments have not been recovered.”

One of the payments totaled more than $560,000 for services involving flood damage repair work. The other three payments were made for compensatory services.

“We want to ensure taxpayer dollars are dedicated to meeting educational needs and enriching students’ experiences,” said Councilmember Isaiah Thomas, Chairman of the Committee on Education, who joined the City Controller’s announcement. “We are committed to full transparency in the spending and management of tax dollars. The public has a right to know how their money is being used.”

The City Controller has oversight and audit responsibilities of the school district. It is the office’s responsibility to report potential instances of fraud to the appropriate authorities for further evaluation.

“I strongly value collaboration and grateful for the continued support of the school district and governing officials,” said Brady. “By working together, we will assist the school district in recovering any available funds and implementing safeguards to prevent future fraud.”

The Controller’s Office can only share the information made available in the letter to the PA Attorney General. Click “Download PDF” above to view the letter.

The Controller’s Office will provide any resources and support to assist the PA Attorney General with further investigation.

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