Williston, Vt.-based Evergreen Family Health has filed a lawsuit against the Bank of Burlington, claiming the financial institution failed to prevent a fraudster from stealing $270,000 from the practice’s checking account, Seven Days reported March 27.
The report outlines the lawsuit, filed earlier this week, which claims the bank should have become suspicious when an account held by Evergreen started making large transfers to newly linked accounts in “rapid succession.” The practice is asking the bank to cover the losses under a fraud protection package it sold to business clients.
The Bank of Burlington is the only business-to-business lender in Vermont, according to the report. Evergreen chose the bank in 2022 and was “persuaded by the Bank’s apparent commitment to fraud protection,” according to the complaint.
Evergreen deposited $250,000 into its checking account and selected the highest level of fraud protection plans. According to the lawsuit, an unknown person accessed Evergreen’s account on Jan. 14, 2025, using information obtained from a compromised staff email account. Over the next 24 hours, 11 same-day transfers were initiated to 11 different accounts, emptying Evergreen’s account.
Evergreen’s controller, Katrina Payea, received an alert on Jan. 17, notifying her that the practice’s account had been overdrawn. According to the report, she was told by the bank that the transfers could be reversed because they were quickly identified, but a week later, the bank told Evergreen the money was gone.
Ms. Payea then reported the fraud to the FBI. The bank had already filed a report, without her knowledge, that was “rife with inaccuracies, mischaracterizations, and objectively false statements.” The unauthorized person had accessed the account from an out-of-state IP address that the practice had never used before, registered a new device and changed the account credentials before carrying out the transfers.
The lawsuit accuses the bank of negligence for its failure to identify and stop the theft. In a meeting between Evergreen’s management team and bank executives, Evergreen was told that the bank had “no responsibility, obligation or capability” to identify the suspicious activity, according to the lawsuit. The lawsuit also accuses the bank of breaching an agreement that states Evergreen would be liable for a maximum of $500 in the event of fraudulent withdrawals, as long as the company informed the bank within two business days.
The practice had also created a security protocol under which any Automated Clearing House transfers that did not meet a certain criteria were supposed to be flagged for a review, which the lawsuit claims never took place.
“We have no additional comment regarding this case which we feel speaks for itself in the complaint filed against the Bank of Burlington,” said Scott Paluska, MD, medical director of Evergreen Sports Medicine. “Evergreen Health Group remains committed to providing outstanding healthcare to our community and its residents.”
Becker’s has reached out to the Bank of Burlington and will update this article if more information becomes available.