Online thieves made a series of unauthorized funds transfers from the school district's NBT Bank account to an overseas bank between December 18 and 22, 2009.
The third transfer during this period was flagged as abnormal activity by the bank, which began blocking pending transactions after the school district confirmed the transfers had not been authorized.
Working with foreign banks, NBT Bank recovered about $2.5 million out of $3 million stolen during the four day period, but two previous unauthorized transactions were discovered.
"Thanks to NBT Bank's aggressive pursuit of the stolen funds, we are fortunate that the vast majority of the money has been recovered," wrote Superintendent Christine Crowley in a letter on Monday to district parents and community members. "However, $497,200 of Duanesburg taxpayers' money is still missing, and we are committed to doing everything in our power to recover the remaining funds."
A school district official was not immediately available for comment.
"At this time, we do not have any more information on how this happened and do not expect to have any more information to share until the investigation concludes," the district says on its Web site.
One possibility is that a school administrator's computer was compromised by an online banking trojan. In recent months, cyber security experts have repeatedly warned about the risk posed by online banking trojans like URLzone and Zeus.
In November, the Internet Crime Complaint Center (IC3) said that the FBI "has seen a significant increase in fraud involving the exploitation of valid online banking credentials belonging to small and medium businesses, municipal governments, and school districts."
In December, Gartner Research VP Avivah Litan published research indicating that cyber criminals have had success defeating two-factor authentication systems in Web browsing sessions using Trojan-based man-in-the-middle attacks.