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The American court system has struggled with solutions for the unprecedented increase in crimes involving digital fakes or forgeries. This national struggle hit the Town of Front Royal, Virginia when a $650,000 forensic audit was conducted of the Front Royal-Warren County Economic Development Authority (EDA). What this audit uncovered was astounding. Over the course of the last ten years, it is alleged that the EDA’s Executive Director, Jennifer McDonald, and possibly others, embezzled millions of dollars. McDonald is currently charged with 28 felony indictments stemming from alleged fraudulent activity; additionally, in an effort to recover money stolen, the EDA has slapped a $21.3 million civil lawsuit on McDonald and others in hopes of recovering some of the alleged embezzled and misappropriated money.
Committed to never letting something like this happen again, the Town of Front Royal is again on the front lines of this nationwide battle against digital fraud, this time as one of the first localities in America to start independently archiving its “Digital Truth” while taking proactive steps to eliminate future embezzlement schemes by utilizing cutting-edge technology.
“When the bills [for the forensic analysis] started rolling in, I think all of our jaws just about hit the floor,” recalls Doug Napier, Front Royal’s Town Attorney. “This wasn’t some outside rouge hacker attacking our community through the Internet, this was a trusted neighbor, a fiduciary, who had authorized access to digital files and contracts. We have seen first-hand the extraordinary cost of what embezzlement, through digital fraud, can cost. So far between the EDA, the Town and the County we have exceeded over $1.2 million just in accounting and legal fees and legal discovery through the court system hasn’t even started yet.”
Like tens of thousands of other local governments across the United States, Front Royal is transforming from an all paper world to one where vital records like contracts, official meeting minutes, public notices, or development agreements are now a mixture of hard copies, scans, and digitally generated and electronically stored files. As these documents move between the various entities and systems throughout local government, local officials must protect both confidentiality and originality at the same time. To do this, Front Royal turned to Trokt from Des Moines, Iowa, to run a pilot project on a unique blockchain-based application for local governments.
“Towns like Front Royal need a cost effective way to ensure that any file, whether it be a PDF, scan, video, image, or Word document, can be instantly validated as real no matter who shares it, where they store it, or what it is renamed,” says Trokt Managing Director Chris Draper.
“Using the same cryptographic technology as the National Security Agency (NSA), we capture what can be likened to a digital thumbprint or the file’s DNA, and permanently store that thumbprint in a distributed neo-public network. At any time in the future that file or any copy of that file can be instantly validated as an original. If the original were altered in any way, even as small a change as moving a decimal point, it could be instantly proven as a forgery.” Draper adds, “Instead of paying hefty fees and the complexities associated with digital forensics when a file is questioned, our technology provides validation accepted in any court for as little as fifty cents.”
Trokt has quietly spent much of the last decade becoming widely trusted within the LegalTech community for its nimble, user-friendly approach to protecting legally sensitive files as they are developed, shared and negotiated between multiple parties, locations, and organizations.
Looking to the future, Front Royal’s Director of Information Technology, Todd Jones, sees a freedom in Trokt’s platform that fits into his vision of an ongoing digital transformation strategy for the Town.
“We see value in piloting this technology based on the very human-centered and simple design philosophy, while incorporating the power of blockchain’s distributed ledger technology”, says Jones. “Of course, not everyone in today’s workforce was born a digital native. We decided to pilot this technology based on its ease of integration and flexibility to adapt to our current and future workflow processes. Based upon what has happened in our community with the EDA scandal, we have to get this right and never allow document fraud again.”
Trokt (www.trokt.com) provides digital collaboration and enterprise blockchain solutions to define Truth within Digital Transformation. The Trokt neo-public blockchain network is a unique, patent-pending architecture catering to the confidentiality and privacy needs of the LegalTech sector. Trokt is headquartered in Des Moines, Iowa.