SOU loses $1.9 million in email fraud

An email scheme has cost Southern Oregon University $1.9 million in lost funds that should’ve gone to the contractor on the McNeal Pavilion and Student Recreation Center construction project, the university announced this afternoon.

Someone posed as a contractor in an email, prompting officials to send the payment to a bank account the contractor did not control.

Local, state and federal authorities were notified immediately after the fraud was discovered, SOU officials said. An FBI investigation was launched and efforts by the university are currently underway on multiple fronts to recover any and all losses, today’s announcement said.

“There are lessons here for anyone operating in today’s electronic business environment,” SOU General Counsel Jason Catz said today in a message to the campus. “We have learned from law enforcement sources that SOU is not the only victim of this particular scheme, which has targeted other U.S. higher education institutions.

“We are also carefully reviewing our own policies and procedures to determine how we can prevent any similar incidents in the future,” Catz said.

SOU is working to reclaim any funds that remain in the bank account to which they were sent. The university is also determining the extent of its insurance coverage, and how it may help to remedy losses from any unrecovered funds, the announcement said.

The incident will not affect any university programs or operations, and will not alter the athletic pavilion construction project, which is scheduled for completion in January, officials said.