Tennessee School District Duped Out of $3.4 Million in Curriculum Vendor Scam

A rural school district in Johnson County, Tennessee, was scammed out of $3.4 million in a sophisticated business email compromise (BEC) fraud. The district’s finance director received fraudulent emails from someone posing as a representative of Pearson, a well-known curriculum vendor, using a misleading email address. The finance officer, believing the email to be genuine, arranged two wire transfers totaling $3.36 million to an account set up by the scammer.

The scam targeted funds from the Tennessee Investment in Student Achievement (TISA) budget intended for curriculum purchases. By the time the fraud was discovered, most of the money had been moved through a series of accounts. U.S. Secret Service agents traced the funds, identifying a 76-year-old Texas man, John Crowson, as the owner of the accounts. Crowson, who claimed he was deceived by an online romantic partner, admitted to receiving the money but believed he was helping his fiancée. Other individuals involved in laundering the stolen funds shared similar stories of being misled by online contacts.

The incident is part of a larger trend of BEC scams targeting school districts. The FBI reported $2.9 billion in losses from such scams in 2023, underscoring the increasing threat posed to educational institutions.