$4 million in federal funding stolen from Lexington KY

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Lexington Police Department police car.

Lexington Police Department police car.

rhermens@herald-leader.com

About $4 million in federal housing assistance funding intended for the Community Action Council has been stolen from the city of Lexington, apparently through electronic 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 the federal rent assistance and transitional housing funds.

“The funds were tracked to three wire transfers into a private bank account,” the city said in a news release. “That account was frozen by the financial institution last night.”

The city does not believe any city employees or Community Action employees were involved in the theft. Instead, “police believe a person or persons outside government directed an electronic funds transfer into a private account.”

The theft occurred 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,” a city spokesperson said.

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

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





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