$4 million in federal funding stolen from Lexington KY

Lexington Police Department police car.

Lexington Police Department police car.

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About $4 million in federal housing assistance funds intended for the Community Action Council was stolen from the city of Lexington, apparently through wire fraud.

The city said in a news release Friday that the electronic theft was discovered Thursday, when the city learned that the Community Action Council had not received federal rental assistance and transitional housing funds.

“The funds were followed by three wire transfers to a private bank account,” the city said in a press release. “This account was frozen by the financial institution last night.”

The city does not believe that any city employee or Community Action employee was involved in the theft. Instead, “police believe that a person or persons outside of government directed an electronic transfer of funds to a private account.”

The theft happened when someone used “a fake community action email address” to communicate with the city, and the money was sent to “a fake community action account,” said a city spokesperson.

The Lexington Police Department’s Financial Crimes Unit is investigating and some federal agencies are also involved, according to a spokesperson.

“Finance Commissioner Erin Hensley said the government’s financial system was not compromised,” the press release said. “The city is working on the fund recovery process and helping the Community Action Council ensure continuity of housing assistance,” she said.

This story was originally published August 26, 2022 5:57 p.m.

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