Bedford School District recovers $1.6M in billing scam
District bilked out of money by man posing as representative of area construction firm
Trending
An Indianapolis man accused of bilking the Bedford Area School District out of more than $1.6 million has been arrested in Indiana state and is awaiting extradition to Bedford County.
Terry Michael Reckert, 70, faces felony counts of theft, forgery, receiving stolen property and related charges after allegedly posing as the owner of a Blair County construction firm working on the district's high school renovation project.
The school district has recovered the full amount of $1,648,656.19, state police reported.
In a statement posted on the Bedford Area School District's website, Superintendent Paul Ruhlman acknowledged the theft and eventual recovery of the renovation funds.
In an effort to be transparent, Ruhlman explained the process, noting that the fraud was reported to the bank and law enforcement as soon as it was discovered. The school board was also informed and activated its oversight process, he stated.
As a result of this fraud attempt, the district reviewed all its internal processes as requested by the board, he said.
"Additionally, I would like the community to know we value your trust and please recognize we face numerous, almost daily attempts to fraud the district," he stated. "Frankly, I am usually the primary target as our email cyber security identifies fraud attempts to my email multiple times a day."
Police reported that the theft was linked to an email that appeared to come from Altoona-based J.C. Orr & Son, updating the firm's mailing address for payment. That email, sent to the district's assistant chief operating officer, included a W-9 form, updated address in Indianapolis, the proper Employer Identification Number and an electronic signature from the contractor's accounts receivable manager.
The theft went unnoticed until district officials were contacted by the construction firm asking about payment for recent work the company completed on the building project.
This inquiry, made on July 9, spurred the investigation, as the district's financial records show the payment by check was sent on June 17. In addition, records show the check had been deposited on June 22 into a bank in Indianapolis, the report states.
Further investigation into the matter shows how the alleged scheme was carried out through that one email to the district, according to court documents.
The email, sent on June 16, was allegedly from the construction company. But during an interview with police, the construction company's accounts receivable manager said the email address was not affiliated with J.C. Orr & Son, nor did she fill out or sign the W-9.
Police traced the address provided in the email and found that it was associated with Reckert. In addition, a review of the signature on the back of the check appeared to be Terry Reckert, police reported.
With that information, police served a search warrant July 17 on First National Bank in Bedford, which holds the school district's line of credit for the building project, the report states.
The search confirmed the check in question was deposited at Old National Bank in Indianapolis, Indiana, specifically the Arlington Woods branch, within a four-minute drive of Reckert's home.
A search warrant was also served July 17 on the Old National Bank for account information on Reckert, police reported. That information was received July 28 and verified by bank video surveillance. It showed that Reckert opened a business checking account on June 22 and forged three documents -- a Corporate Authorization Form, an Account Agreement Form and a Legal Entity Destination Form -- claiming that he was the owner/CEO of J.C. Orr & Son Inc., using the company's EIC number.
Reckert used his own name, signature, personal address, Social Security Number, date of birth, phone number and email address for the account, police reported.
He then deposited the check from Bedford Area School District's First National Bank account made out to J.C. Orr & Son Inc., using his signature, court documents state.
State police issued an arrest warrant for Reckert on July 30 and Reckert was taken into custody on Aug. 3, with the assistance of the Marion County Sheriff's Office in Indianapolis, police reported. He is currently awaiting extradition to Bedford County to face charges.
Due to the investigation, the check was withdrawn and the money was returned to the school district, police reported.