The Mayor’s open letter to Clark Fork residents

Fraud Update 7/9/2025

In November 2024, the City experienced an incident of criminal fraud concerning its water infrastructure project. Upon discovering the fraud, the City promptly initiated efforts to recover the misappropriated funds and provided relevant information to authorities to pursue the responsible parties. In the subsequent months, the City gathered data that would help assess its accountability for the financial loss, while also engaging experts to evaluate the security breach. Ultimately, the City successfully recovered approximately $192,937.22 of the total $483,519.12 that had been misdirected to a threat actor.
While this matter remains under investigation by the Federal Bureau of Investigation, the City has spent recent months assessing the legal implications for the three local entities involved: Noble Excavating, Century West Engineering, and the City itself. This internal review, led by the City’s general counsel, Silver Valley Law, and the litigation firm Givens Pursley, revealed three key findings:
1. The security breach that allowed a threat actor to infiltrate email communications between Century West and Noble was unlikely to be the City’s responsibility, nor could the City have taken measures to prevent the breach.
2. Even if the City is not deemed responsible for the security breach, there remains a likelihood that, if litigated, the City could be held accountable for all or part of the financial loss.
3. The costs associated with litigation for the City are likely to exceed the actual financial loss incurred.
The City made attempts to engage both Noble Excavating and Century West to negotiate a potential settlement regarding this matter. It had become evident that neither party was willing to accept responsibility for the loss, placing the City in a challenging position where it must decide between expending a certain amount to resolve the issue or pursuing litigation, which carried the risk of incurring uncertain costs related to court fees, attorney expenses, and expert witnesses. Given the high costs of litigation to establish that either Century West or Noble Excavating is primarily responsible, as well as the possibility that a jury may find any or all parties jointly liable, it appears prudent for the City to seek a proactive resolution to this dispute.
During settlement discussions, Century West indicated a willingness to accept approximately 10% of the loss while maintaining their position that they should not be held responsible. Similarly, the City Council has taken steps to resolve this matter by accepting Century West's contribution and offering to compensate Noble Excavating for the remaining balance of approximately $290,581.90, with each party bearing their own costs incurred in analyzing this dispute. This approach represents the most prudent path forward for the City, minimizing outstanding liabilities.

As the FBI investigation remains outstanding, a possibility remains that additional funds may be received back to the City if the threat actor is located or apprehended at some point in the future. However, a timeline for investigation completion is uncertain, necessitating a resolve to this matter in the interim. Therefore, the City has taken those steps necessary to resolve this dispute as to both Century West and Noble Excavating, and will proceed forward at this time with future aspects of the water infrastructure project to ensure that plans for services remain on track with anticipated timelines.

Sincerely,

Russell Schenck, Mayor