The Los Angeles County District Attorney’s office has launched an investigation into $190,000 of illegal wire transfers involving the Directors Guild of America.
The probe stems from an incident nearly a year ago when the DGA computer system was apparently hacked.
Shiara Davila-Morales, a spokeswoman for the District Attorney’s office, confirmed the investigation to Variety but said she could not “discuss the facts of an ongoing investigation.”
The DGA made the disclosure in a note at the end of its LM-2 report to the U.S. Department of Labor for 2013. According to that report, filed in March, the union’s accounting department noticed an unauthorized outgoing wire transfer dated May 13, 2013 in the amount of $190,000 from its operating account and notified the District Attorney’s office.
“That same morning, the DGA notified its bank that the wire transfer was not initiated or authorized by the DGA,” the union said. “On May 15, 2013, representatives of the DGA met with investigators from the Los Angeles District Attorney’s office to inform them of the incident and discuss the matter with three of that office’s investigators.”
The recipient was an apparently fictitious company “Delta Services LLC” at 1st Tennessee Bank. The DGA said it has “since been informed that the unauthorized transfer probably was initiated overseas by unknown persons hacking into the DGA’s computer network.”
The DGA said that, although a majority of the unauthorized wire transfer was ultimately recovered and returned through City National Bank, the DGA sustained a loss of $86,618.43.
“The DGA made a claim with its insurance carrier, but the insurance carrier has indicated that it will deny that the loss is covered by the DGA’s insurance policy,” the report said. “The DGA subsequently installed new computer network security software and put in place wire transfer procedures to minimize the likelihood of an unauthorized wire transfer in the future. No member information was accessed or compromised.”
A spokesperson for the DGA said that there have been no other hacking incidents involving DGA funds.
The spokesperson said that besides making the disclosure in the LM-2, the DGA staff has also informed the national board about the hacking.
In the report, the DGA reported assets of $79.3 million as of Dec. 31 and liabilities of $26.8 million.