New Ohio law requires local governments to set up online fraud protection

COLUMBUS, Ohio (WCMH) -- Cyber fraud is costing local governments across Ohio hundreds of thousands of dollars. 

Here in Columbus, a 2024 ransomware attack cost the city millions, and it's happening all across the state. 

The Ohio Auditor of State said there isn’t a week that goes by that his office doesn't receive an alert that a local government somewhere in Ohio has suffered a loss due to cyber fraud, and those losses are almost always more than $10,000 and usually closer to $100,000.

Now, the state has a new law that aims to fight back against the cyber criminals. 

“The criminals needed to get a message that don't target Ohioans, don't target Ohio government,” Ohio Auditor of State Keith Faber said. 

Any entity receiving government money has to adopt a cybersecurity program that falls in line with widely used cybersecurity standards. That plan will need to be in place by Jan. 1, or they’ll risk getting flagged in a state audit. 

“It actually requires governmental entities, when they're subject to a cyber fraud event, to report it immediately,” Faber said. “A lot of governmental entities wanted to bury their head in the sand and, you know, public officials don't like bad press. And so we said we don't care about the bad press, if we find out what's going on, we can alert other entities to avoid similar losses.”

The auditor’s special investigations unit tracks all types of fraud, from theft of public funds to conflicts of interest in choosing vendors, but there is an added focus on cyber threats. 

“Almost everything has pivoted to computers and electronics, and that has really changed the dynamic of how we have to maintain security,” Faber said. 

There are still many investigations into other types of fraud and Faber is pointing out some of the red flags to be aware of, including abnormal purchases, missing documents and altered records. 

Faber said a lot of the investigations start with a tip from someone in the community. 

The special investigations unit is made up of forensic accounting experts, fraud detectives and attorneys with experience prosecuting white-collar crime.

The fraud can look like false billing, personal use of government resources, and theft of government property. 

In 2023, one case that got a lot of attention involved a fiscal officer in Vinton Township who used township funds to buy a wildebeest and hot tubs for his roadside zoo.

“I always tell people, I said, you know the auditor's office, everybody thinks is this sleepy backwater state government office,” Faber said. “We do a lot of really cool stuff, whether it's performance audits of government to make government work better, faster, cheaper.”

Since 2019, the auditor’s investigation unit has recovered almost $30 million in fraud. 

“When individuals see something that doesn't look right in government, let us know, we will investigate 100% of them,” Faber said. 

Faber said that more than 80% of their criminal investigations come from a tip. If you see something you suspect to be government fraud, you can report it here. Red flags to look out for can be found here.