PUBLIC RELEASE FEBRUARY 2026 UPDATE
- kzielinski3
- Feb 6
- 5 min read
Following is updated information on the cyber crime committed against the Spotswood School District and the Borough of Spotswood. In October 2025, the Borough of Spotswood (the “Borough”) and the Spotswood Board of Education (the “Board of Education”) were the subject of a cyber security incident, which resulted in the Borough, through its legal depository, erroneously forwarding approximately $3,300,000 of local school taxes belonging to the Board of Education to a bad actor impersonating the Board of Education. Both the Borough and the Board of Education were spoofed by a third party cyber criminal which resulted in both the Borough and Board of Education believing they were dealing with each other when in fact they were not.
Although this criminal investigation is ongoing the Board of Education has advised the Borough that its operations will be severely affected unless an amount equal to the stolen funds is remitted by the end of the first quarter of 2026.
Accordingly, the Borough has determined to advance funds to the Board of Education and is now seeking to do so in the most fiscally appropriate manner, while it continues to pursue its legal remedies and seeks funding from additional sources, including reimbursement through the Borough and Board of Education insurance carriers and potential State aid.
What is the status of the criminal investigation?
The Middlesex County Prosecutor’s Office (MCPO) has an active criminal investigation ongoing. Our Borough Attorney met with the Prosecutor last week and we hope to have an update shortly. We have received assurances from that office that no employee of either entity is involved in this crime.
What have we done to ensure this sort of cyber crime doesn’t happen again?
The Borough is implementing multi-factor authentication for systems access and has engaged the firm KnowBe4 to conduct cyber security training, develop internal policies and procedures, and to conduct periodic testing. Forensic examinations of our IT systems have been completed showing that no other financial transactions or critical information was compromised. Cyber training for all employees in both entities, Borough and School District has been completed and there will be ongoing training moving forward.
What have we done to recoup the monies lost?
We contacted our State Senator the day after the criminal attack to request funding from the state. Those conversations are ongoing. The inauguration of a new administration has delayed that effort. We filed an insurance claim the day we learned of the loss. Our claim is pending. The Board of Education has also filed a claim. The BOE has represented to the Borough that any proceeds to be obtained from any claims by the BOE will be forwarded to the Borough should the Borough satisfy the current outstanding amount owed to the BOE.
Due to the efforts of our Borough attorney and the MCPO, $233,000 of the fraudulent wire was recovered and is frozen. We have formally requested the return of those funds. We are hopeful that the investigation will yield additional recoveries. There is also the potential of litigation on our part to recoup added monies.
Why can’t we shift monies from our budget to pay this obligation? Why do we have to borrow it?
We do not have an additional $3.3 million dollars available to us. As most of our budget is dedicated towards fixed costs, like salary and benefits, no such surplus exists.
Why do we have to repay this money to the BOE at all?
As the collector of taxes for the township, we have a statutory obligation to pay the County, the Library and the School District the taxes they levy. Failure to do so would critically impact the operations of the school district and likely result in litigation against the Borough, causing additional costs.
Why can’t we wait until we get the recoveries mentioned to repay the BOE?
It’s a matter of timing. It could take months or longer to recoup the monies lost or a portion thereof. The BOE will be unable to properly operate before then.
Why do we have to go to the Local Finance Board on this matter?
To borrow $3.3 million dollars requires the approval of the state through the Local Finance Board.
How much will this cost us?
We are not sure of the exact amount yet because we haven’t appeared before the LFB yet. We were scheduled to appear on February 11th but our appearance was rescheduled to March 11 as we needed to pass certain resolutions before that but did not, as well as the failure of the previous administration to complete the 2024 audit before leaving office.
For planning purposes, we note that the full amount of the stolen funds will need to be included, at least temporarily, in the Borough’s 2026 budget. However, because this budget inclusion would have a devastating tax impact ($1,136 on the average assessed home) if fully paid with this year’s budget, and since the funding gap was caused by criminal acts (and not fiscal imprudence), the Borough is requesting the ability to spread the tax impact over several years (the duration to be subject to the Local Finance Board’s discretion). The Borough is requesting a fifteen (15) year amortization schedule, which will result in a tax impact of approximately $101 on the average assessed home in 2026. This approach would enable the Borough to ramp down its future annual funding amounts as we recover the funds from the sources noted above. If we recovered all the money lost, we would retire the bonds early without prepayment penalty.
What is our credit rating? What impact will this have on it?
The Borough’s credit rating is Aa3. Obligations with this rating are judged to be of high quality and are subject to very low credit risk. As we currently have limited debt, even adding this bonding should not reduce our rating.
How can I learn more about this issue?
We have discussed this issue at each Council meeting since November. We have also answered public questions at each meeting.
Here’s a link to view the videos of those meetings.
If you would like to review the minutes of those meetings, they can be found here.
Click on the folder for the meeting of interest and open the Minutes tab.
How can I help?
Contacting our state legislators for the 12th District and adding your voice to our request for aid would help. Here’s the link.
I share your fear and frustration over this situation and ask for your patience as we work through it. As I get new information to share, I will issue updates.
Rich O’Brien
Mayor
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