Massachusetts City’s Pension Fund Lost $3.5M in Email Scam

An employee of Quincy’s pension fund wrongly sent $3.5 million in a wire transfer in February 2021 in response to a scam email and the funds have not been recovered.

The Public Employee Retirement Administration Commission is investigating the Quincy Retirement Board after it reported the transaction in October, the Patriot Ledger reported on Monday.

An investment manager for the pension fund made the transfer after receiving instructions in an email from a former employee’s email account that had been hacked, the newspaper reported. The board did not uncover the fraud until months later.

“Once the board learned of this unauthorized transfer of funds, it immediately notified the appropriate state and federal law enforcement and regulatory agencies and the board is fully cooperating with the ongoing civil and criminal investigations into this matter,” Michael Sacco, the board’s lawyer said in a statement.

John Parsons, executive director of the commission, said that its investigation would take several more months and that it would issue a public report when it is complete.

The email hack and the fraudulent transfer were not immediately reported to public, the newspaper reported.

The five-member board and four staff members manage hundreds of millions of dollars in the city’s pension fund. It is prohibited from entering into new investments until the commission’s investigation is complete, the newspaper reported.

The theft was not initially disclosed as part of a request from Quincy Mayor Thomas Koch to approve more than $450 million in bonds to fund the city’s pension plan. Parsons told the newspaper that when the commission learned in May 2021 that the theft was not disclosed as part of the bond request, it contacted the board who amended its disclosure the next day.

The pension bond has been fully funded but is managed by a different body, the Pension Reserves Investment Management Board, the newspaper reported.

Topics Massachusetts