Mobile officials confirmed that a fraudulent email scheme diverted $14.7 million from the city’s Finance Department to scammers posing as B.L. Harbert International, the lead contractor on the Regions Arena project. According to Fox 10, the fraud occurred after the department received an email on May 27 requesting a change to the contractor’s banking information.

Mayor Spiro Cheriogotis told reporters that the email appeared authentic, featuring the correct logo, website address and phone number, but the domain contained extra characters that should have signaled a problem. “Their email address doesn’t perfectly match that,” the mayor said, calling the discrepancy a “huge red flag.” He added that staff also ignored other warning signs, such as the fraudster’s claim that the change was needed because the contractor was undergoing an audit and the request for copies of prior invoices.

The fraudulent request asked the city to switch payment from a direct wire transfer to an automated clearing house (ACH) transaction. The Finance Department processed the transfer on October 5, after the request was made on October 2. By October 7, officials noticed irregularities, but the mayor did not learn of the full scope until October 16. He said quicker action could have stopped the transfer.

In response to the loss, Mayor Cheriogotis terminated one employee and placed two others on administrative leave. He emphasized that the city has launched multiple internal and external investigations. The mayor also noted that the Finance Department has strengthened its verification procedures since an earlier August fraud attempt that nearly cost Mobile more than $900,000. New safeguards require multiple layers of approval, including direct contact with pre‑approved vendor phone numbers and hand‑delivered checks for payments exceeding $1 million.

“Red flags were everywhere, and they were not chased down,” Cheriogotis said. He expressed frustration on behalf of residents, acknowledging public anger over the mishandling. The mayor affirmed confidence that the updated protocols would have prevented the $14.7 million loss had they been in place at the time of the May email.

What’s next: City officials expect the investigations to conclude in the coming weeks, and the Finance Department will continue to enforce the tightened verification steps for all future vendor banking changes.

Sources: fox10tv.com