Please be advised that in the last four weeks, at least three school districts in the state of Illinois have had various bank accounts depleted by $300,000 to $350,000. The thefts have occurred through electronic transfers from district accounts to outside accounts. Although the investigations involved in each of the affected districts continue, it is believed that outsiders have somehow obtained account numbers and routing numbers and are making unauthorized transfers to divert the money to outside bogus accounts. While the FBI is working on these cases, we encourage the following actions:

• School districts should contact their banks and apprise of them of the situation. Additional safeguards should be put in place immediately, and the banks should carefully watch school district accounts at all times for any signs of theft or unusual electronic transfers.
• School districts may also wish to bring in their outside auditors to discuss any other safeguards that the auditors deem necessary in view of this situation.

For further information, please contact Scott E. Nemanich or your regular Hinshaw attorney.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.