Federal law enforcement agents are investigating an e-mail fraud scheme that bilked the city of Cottage Grove out of more than $1.2 million last year, according to court documents made public this week.
According to five seizure warrant applications signed off on by a federal magistrate judge this month, the fraud involved someone posing as a legitimate company that the city contracted for a sewer project. The fake account convinced the city’s accounting specialist to wire money to them and not the real contracted company before the scam was discovered late last year. By the time the fraud was uncovered, the money had been spread to multiple other bank accounts.
Homeland Security Investigations special agent Joseph Jarvis, in a signed application and affidavit for five seizure warrants this month, described how an unknown person posed as the president of a company hired to perform a $3.5 million sewage construction project and convinced the city to send more than a third of those dollars to a fraudulent account.
In response to a request for comment from the city, Cottage Grove Police Chief Peter Koerner said he could not comment as the “case is still considered an active investigation.”
A spokesperson for the U.S. Attorney’s Office meanwhile said Thursday that “the government will be seeking forfeiture of the funds.”
U.S. Magistrate Judge John Docherty approved five seizure warrants this month involving $852,337.55 allegedly tied to the fraud.
Jarvis’ affidavits described the case as an investigation into a “business e-mail compromise and electronic funds transfer wire fraud scheme” that victimized the city.
Cottage Grove had entered into a $3.5 million contract in June 2021 for a sewage construction project with Watkins, Minn.-based Geislinger & Sons. Jarvis wrote that the fraud started in October when someone contacted the city’s accounting specialist using an e-mail account posing as the company’s president.
The initial correspondence with a Geislinger & Sons office manager was through a legitimate e-mail address that ended in “geislingerandsons.com.” On Oct. 13, the accounting specialist sent a $489,746.61 payment to the company. Days later, an unknown person e-mailed the accounting specialist from an e-mail account that ended with “geislingerandsonsinc.com” — impersonating Jeff Geislinger, president and CEO of the company. Jarvis noted that the “inc” was unlike the original, legitimate address.
According to the affidavit, the fake account told the city employee that Geislinger & Sons “have made some company financial changes and moved all its banking to a new bank,” and asked her to “kindly update…
