Fergie's Tech Blog

Cyber Heist Crushes Bank

Kevin Coleman writes on Defense Tech:

Dwelling House Savings and Loan, a 119-year-old thrift, was shut down by federal regulators on Friday August 14th. The small thrift was said to have had only about $13.8 million in deposits. Federal regulators have been concerned about account security at Dwelling House Savings & Loan for several years.

The S&L suffered a severe blow to its viability late in 2008 when federal auditors uncovered that around $3 million had been electronically drained out of its capital account and that the bank was actually operating with $500,000 in a negative equity position. The cyber theft equated to 21.7 percent of the S&L’s deposit assets.

According to bank officers, cyber thieves (10 to 12 individuals) were behind the heist via electronic bank transfers that are now being given as the biggest reason the institution became insolvent and ultimately failed. Bank officers blamed the heavy losses on the work of a ring of cyber thieves. Pittsburgh police and FBI agents are investigating the case.

posted by Fergie @ 8/17/2009 09:39:00 PM