WAPA: Missing $2.17 Million Was Stolen in Email Scam

Lawrence Kupfer, executive director WAPA. (File photo)
Lawrence Kupfer, executive director WAPA. (File photo)

The Water and Power Authority issued a brief statement over the weekend giving a small amount of information on how more than $2 million was apparently stolen from the utility. News of the loss came out last week and was the source of ire at a June 5 Senate committee hearing.

Twice in 2018, WAPA paid invoices that appeared to be from a legitimate vendor, paying out $2.17 million, according to the statement from WAPA, which refers to the scam as a “Business Email Compromise.” The FBI is investigating the thefts.

A Business Email Compromise is a type of scam targeting companies that conduct wire transfers. Corporate or publicly available email accounts of employees that conduct financial transactions or are involved with wire transfer payments are either spoofed or compromised through key-loggers or phishing attacks to carry out fraudulent fund transfers.

Since the incidents, WAPA has provided overall cybersecurity training for its staff as well as training on recognizing phishing emails that can lead to this type of scam and revised its financial control procedures.

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Water and Power Authority on St. Croix.
Water and Power Authority on St. Croix. (File photo)

“The training is recurring, and we use controlled phishing emails to test our employees ability to determine authentic from bogus emails,” WAPA Executive Director Lawrence Kupfer said in the news release.

“While we can say very little until the federal investigation into the incidents is complete, I thought it prudent, in light of the Senate discussion this week, to reassure the community that while WAPA was victimized by the BEC incidents, we have taken all advisable security measures to ensure an incident of this nature does not recur. Equally as important, WAPA’s networks, customer information, computer systems, or its overall digital infrastructure were not compromised,” Kupfer added.

Efforts to get more information from WAPA spokesperson Jean Greaux on Monday were unsuccessful. Greaux said he was not authorized to say more than what was in the news release.

Among the questions awaiting answers are:
– As money was moved out of an account to another location, can that be traced?
– What vendors did the thieves imitate?
– Are there any leads on who did the scam?

This and other instances of apparent mismanagement have bolstered calls by some senators, Public Service Commission members, the St. Croix Chamber of Commerce, radio hosts and others to punish WAPA by not allowing it to charge enough to pay for the fuel it purchases and not allowing it to increase the base rate to pay for equipment leases, training and maintenance of its facilities.

If WAPA cannot pay for the fuel it burns it will be unable to purchase fuel to burn to generate power.

If WAPA cannot pay for maintenance or upgrades, it will not perform maintenance or upgrades to improve reliability and efficiency.

See: Opinion: After Sweet Meat Comes Sour Sauce (Senators Please Stop Playing Games and Be Responsible With WAPA)

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7 COMMENTS

  1. Mistake? Once is a mistake. Twice is sheared stupidity! I hope that person is still not with wapa. Training to bring awareness so it won’t happen again? Really? They gave away 2.3 million then spent more money to train people on how to recognize bogus emails . Give me a break!! Who are they trying to fool? Well . I think the chief ,cook , and bottle washer needs his salary cut so that we can get our 2.3 million back. He works for $340,000 minus $250,000 for 10 years that should get us back our 2.18 million with interest. Ninety thousand dollars a year should be enough for someone sleeping on the job and employing idiots who can’t recognize a scam when they see it . Unbelievable!

  2. Is it any wonder why we have some of the highest electricity rates in the WORLD?!

    Privatize WAPA and make it a regulated utility, just like the stateside model. Only government can accomplish such a complete mess and waste this much taxpayer money.

    • An article on a recent study on private vs public utilities starts,

      “When local governments turn to private companies to manage vital utilities like water, energy, and public health, the poorest customers often lose. By law, private utilities can set their rates based directly on the cost of their investments, which means they can charge a lot, with little concern for how that impacts low-income consumers. Unlike public utilities, private utilities do not serve a constituency—they serve investors.

      But according to a forthcoming paper in the American Journal of Political Science, the public utility model has some drawbacks, too. Its reliance on public support can compromise its ability to make crucial infrastructure upgrades. As a result of poor funding, public utilities can also fail to meet federal public regulations. And yet regulators are more lenient with them than with private utilities, since harsh punishment only further hurts the public.”

      Sounds familiar.

      • Fair comparison, I have read that too. But I have always wondered since WAPA is a government entity, and PSC is a government entity, then they are different sides of the same coin, are they not? So whom can the consumer turn to when they have a grievance? It seems that if a private entity is running WAPA, then the PSC would act as a watch dog, and perhaps this would be more of a check and balance. As it is, there are no checks and balances. The consumers have NO ONE in their corner.

  3. It’s almost seems like a conspiracy amongst WAPA personnel to defeat this guy Kupfer. As an outsider, he has held on longer than expected. I don’t think he is going to survive too much longer. He started WAAYY behind the starting line, has had to do a huge cleanup job after that last clowns who ran it, and has been stymied at every turn. His beleaguered facial expressions before every senate inquiry are priceless. Have to give him credit for hanging in there as long as he has.

  4. I don’t believe their excise for a moment.
    They wired that money to an offshore account of theirs and have been stealing for years and they got caught this time.
    (This is my opinion and I have no proof)
    They should All be punished and the
    V.I. Govt should let vendors come in and start making bids on providing us power at a reasonable rate.

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