At first glance, a construction company’s request in 2016 to change its direct deposit account information on file at the Arkansas Department of Transportation seemed legitimate.
But it turned out to be a scam, resulting in $2.4 million intended for Crossland Construction Co. of Columbus, Kansas, instead going in the account of Shelly S. Singhal of Newport Beach, California, according to an indictment issued July 7 by a federal grand jury in Arkansas.
Singhal is facing 11 federal counts: one for conspiracy to commit wire fraud, nine for wire fraud and one for obstruction of justice. As of Thursday, he had not entered a plea in U.S. District Court in Little Rock, and the docket doesn’t show that he has an attorney.
The indictment said that after the fake Crossland employee made the direct deposit request, ArDOT told the purported employee to fill out a direct deposit authorization form and submit a canceled check or another method to verify the new account.
The person did that. And the form appeared to be signed by Crossland’s CFO. But the direct deposit account belonged to Singhal, the indictment said.
Between Aug. 10, 2016, and Sept. 14, 2016, nine transactions totaling $2.4 million and meant for Crossland landed in Singhal’s account, the indictment said.
Singhal then moved the money around to his other accounts and sent $316,000 of ArDOT’s money to a bank account in Spain, the indictment said. (The indictment identified the owner of that account only as a high school classmate of Singhal who lived in Spain.)
On Sept. 20, 2016, Crossland and ArDOT discovered that the payments had been fraudulently sent to Singhal’s account.
A bank investigator called Singhal and let him know that his accounts had been frozen.
“Got it. Thank you very much,” was his reply, according to the indictment.
Crossland told Whispers in an email that it was eventually paid in full by ArDOT.
“To be clear, the email compromise fraud was perpetrated on ArDOT and not on Crossland,” the company said.
An ArDOT spokesman said it expected an indictment was coming but didn’t know when.
“We’re pleased to be at this point,” ArDOT said.
The U.S. attorney’s office for the Eastern District of Arkansas said the money that was frozen in Singhal’s account would be forfeited and returned to the victim, but the amount wasn’t publicly available.
Meanwhile, Crossland said it has been educating its clients, subcontractors and vendors on business email fraud. It also has been offering tips that governments and businesses can use to protect themselves from cyber and other theft threats.
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