Johnson County Schools targeted by scam

MOUNTAIN CITY, Tenn. (WJHL) – Johnson County Schools fell victim to a scam that cost the school district almost $3 million.

The school system works closely with Pearson Connections Academy, an online school. Its not unusual for the district to send monthly payments to Pearson, but this time they were caught in a scam.

"Their students are funded through us, and then it flows through to them, so we send them the payment monthly, this was nothing unusual for us to do this every month," said Johnson County Director of Schools Mischelle Simcox.

Simcox told News Channel 11 that they did everything as they usually would but the sender posing as Pearson asked for a wire transfer, which Simcox said she felt was unusual.

"It goes not only through our school system, but also our county. They had requested a wire transfer, so that was unusual and we had questioned that several times with who we thought was Pearson," Simcox said. "They had sent all the correct paperwork, several things had been done not only at the school system, with the government and with the banks. Everything was in place and seemed, legit."

It wasn't until the school system was notified of fraudulent activity by the bank.

"I guess one of shock and, it sort of makes you sick to know that this this has happened," said Simcox.

Once notified of the fraudulent activity Simcox said they immediately contacted law enforcement and cyber security to conduct an investigation.

"The majority of the funds, if not all of the funds have been recovered," said Simcox. "We have not gotten a specific amount, this is in the Secret Service and the FBI's hands now."

It's a mistake that Simcox said will not happen again.

"The finance director and myself immediately changed our passwords for our emails, and we did a multi-step authentication for all employees to go through," said Simcox. "We put that in place immediately as well."