Mobile city leaders announced Tuesday that a fraudulent wire transfer siphoned $14.7 million from the city’s finances. The loss, described by Mayor Spiro Cheriogotis as the result of a “months‑long” scheme, directly impacts taxpayers and the $300 million Regions Arena project.
According to FOX10, the fraud began in late May when a con‑artist posed as a representative of B.L. Harbert International, the contractor building the downtown arena. Executive Director of Finance Logan Gewen Jr. testified that the impostor gradually built a rapport with city staff, eventually convincing an employee to forward a legitimate invoice from the real contractor to the fraudster. Using the authentic invoice details, the criminals fabricated a payment request that appeared as a routine monthly arena disbursement.
The city processed the payment on Oct. 2. B.L. Harbert raised questions on Oct. 7 about a missing payment and followed up again on Oct. 13. By Oct. 16, city officials discovered the funds had been diverted to a false account, confirming the fraud.
Mayor Cheriogotis noted that the criminals also took advantage of staff distractions caused by preparations for Hurricane Isaias. He emphasized that the payment itself was “fairly routine,” with the only difference being the destination account. In response, the mayor terminated one employee and placed two others on indefinite leave, stressing that “good people make bad mistakes.”
The fraud follows an earlier, undisclosed attempt in August that was thwarted within two days, allowing the city to recover the misdirected money. Cheriogotis said such attacks are “occurring constantly” and that large projects like the arena attract criminal attention.
In the wake of the loss, the city council is moving quickly to strengthen oversight. Councilman Josh Woods proposed forming a temporary committee modeled after a past sales‑tax committee. The Finance Committee is scheduled to meet on Nov. 11 and Nov. 17 to consider the proposal, which would bring certified public accountants and other outside experts to review city payment policies and recommend improvements.
City officials also announced additional safeguards around changes to vendor payment information, though they acknowledged the fraudsters had already gained a foothold before those measures took effect.
What’s next: The council will vote next week on establishing the temporary review committee. Residents can expect the Finance Committee’s meetings on Nov. 11 and Nov. 17 to address the fraud response and potential policy changes aimed at protecting taxpayer dollars.
Sources: fox10tv.com, lagniappemobile.com
