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A fuel distribution firm in North Carolina lost more than $800,000 in a cyberheist earlier this month. Had the victim company or its bank detected the unauthorized activity sooner, the loss would have been far less. But both parties failed to notice the attackers coming and going for five days before being notified by a reporter.

Organized cyber thieves began siphoning cash from Mooresville, N.C. based J.T. Alexander & Son Inc. on the morning of May 1, sending money in sub-$5,000 and sub-$10,000 chunks to about a dozen “money mules,” people hired through work-at-home job scams to help the crooks launder the stolen money. The mules were paid via automated clearing house (ACH) payment batches that were deducted from J.T. Alexander’s payroll account.

The attackers would repeat this process five more times, sending stolen funds via ACH to more than 60 money mules. Some of those mules were recruited by an Eastern European crime gang in Ukraine and Russia that I like to call the “Backoffice Group.” This same group has been involved in nearly every other cyberheist I have written about over the past four years, including last month’s $1.03 million theft from a nonprofit hospital in Washington state.

David Alexander, J.T. Alexander & Son’s president, called the loss “pretty substantial” and “painful,” and said his firm was evaluating its options for recouping some of the loss. The company has just 15 employees that get paid by ACH payroll transactions every two weeks. At most, J.T. Alexander’s usual payroll batch is around $30,000. But in just five days, the thieves managed to steal more than a year’s worth of employee salaries.

The company may be able to recoup some of the loss through insurance: J.T. Alexander & Son Inc.’s policy with Employer’s Mutual Casualty Company (EMC) includes a component that covers cyber fraud losses, but the coverage amount is far less than what the victim firm lost.

“They’ve got some specific coverage, but unfortunately the amount of coverage they’ve got is not going to cover anywhere near the amount of money they lost,” said Jim Mitchell, an adjuster for EMC.

According to J.T. Alexander & Son, the company’s bank – Peoples Bancorp of North Carolina Inc., a state-chartered bank with $1.1 billion in assets and 22 branches across the state — had just upgraded its security system a month prior to the cyberheist. Before the upgrade, the company’s controller had to enter a login ID, password and then enter a six-digit code that was read by an automated system at the bank that would call them.

“Also, it used to be we could only access the bank’s site from my computer,” said Kristie Williams, who works in accounting and finance for J.T. Alexander. “The way [the bank] changed it, anybody anywhere could access it as long as they had my login, and apparently that’s what happened because the logins came from a different IP address than our normal one. I think they made it more convenient, but less secure. I wasn’t aware all of that had changed.”

Peoples Bank did not return calls seeking comment.

These types of cyberheists — in which neither the victim organization nor its financial institution notice the theft for days on end — can be especially costly. It’s difficult to assign blame for such incidents to either the victim or its bank — there were failures on both parts, to be sure — but typically the liability for these breaches lies with the victim. That’s why it’s vitally important for small businesses that wish to bank online to assume they are targets of organized crime and to take the necessary precautions, wherever possible.