A malicious email has turned into a nightmare for Milford Management
Milford Management was allegedly duped into handing over $19 million to fraudsters in early July thanks to a spoofing email that purported to be from the Battery Park City Authority.
Now the Board of Managers of the Liberty Terrace Condominiums filed a lawsuit in New York Supreme Court alleging that some of the money lost to the alleged fraud included over $1.3 million in board funds that were supposed to be used to pay government agencies
The board alleges Milford, Liberty Terrace’s management company, collected funds from unit owners and tenants to pay Battery Park City Authority, a quasi-government agency. The money was intended to pay the board’s ground rent, facilities fees and payments in lieu of taxes.
But Milford allegedly sent funds to the wrong bank account.
Someone posing as an employee of BPCA sent Milford an email to wire the funds to TD Bank instead of Bank of New York Mellon, the bank that handled the board’s account.
The email came from an email address of @bpca-ny.com as opposed to @bcpa-ny.gov.
The board alleges Milford performed “no diligence and slavishly obeyed the fraudster’s new set of wire instructions, wiring away $1.3 million of the board’s money to the cyber thieves without so much as a phone call confirmation from a known BPCA employee, email verification, or second thought,” according to the complaint.
The board’s funds never arrived at BPCA, resulting in a default. When the agency flagged the unpaid debt days later, the board alleges in its lawsuit that Milford buried “its head in the sand” and neglected to inform the board about the issues.
The board says that Milford has neither reimbursed the funds nor settled the board’s debts with BPCA. Residents now face unpaid bills with interest and penalties accruing, according to the lawsuit.
The board claims Milford failed to perform any internal or external cybersecurity audits or follow the recommendations of those audits.
“With bank and wire fraud so prevalent, the Board reasonably expected Milford to maintain industry-standard safeguards to detect and prevent such schemes,” said Terrence and Darren Oved of Oved & Oved. “Milford’s failure to do so caused our client significant harm — a failure we are determined to rectify.”
Milford Entities owns three buildings in Battery Park City and manages six other buildings, collecting fees from over 2,000 units.
Milford did not return a request to comment.
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