Mobile, Ala. – The City of Mobile announced Tuesday that a criminal fraud scheme diverted $14.7 million of city funds to a fraudulent entity, according to a news release from Mayor Spiro Cheriogotis’ administration.
The administration said city officials promptly notified the FBI and the U.S. Secret Service after discovering the fraud. “We are cooperating fully with investigators and taking every available step to recover the funds and bring the responsible party to justice,” the release stated.
City officials emphasized that the loss has no immediate effect on the city’s financial stability or its ability to deliver services. A city spokesman declined to answer questions about when the fraud occurred, whether city employees were involved, whether the city has insurance coverage for the loss, or whether the administration plans to change its financial and accounting practices.
City Council members were briefed on the matter earlier Tuesday. Councilman Ben Reynolds expressed hope that the federal investigation will result in criminal charges. Councilman Josh Woods, who chairs the council’s Finance Committee, deferred detailed questions but stressed the seriousness of the incident because it involves taxpayers’ money.
Woods said he is confident the city can absorb the financial hit without impacting services, noting the city’s strong financial reserves. He also highlighted that the council recently formalized a practice of expanding a rainy‑day account and that the ordinance was adopted to bolster fiscal resilience.
According to Fox 10, the council’s Finance Committee chair added, “We took it seriously. We made it an ordinance,” underscoring the council’s proactive approach to building a financial safety net.
The city’s response reflects a commitment to transparency and accountability while assuring residents that essential services will continue uninterrupted.
What’s next: The investigation remains ongoing, with federal authorities reviewing the case. City officials said they will provide updates as more information becomes available and as the recovery effort progresses.
Sources: fox10tv.com
