Mobile, Ala. – The city disclosed that a fraudulent wire transfer of $14.7 million, nearly $15 million, was sent to a fake entity during the early‑October phase of the Regions Arena construction, according to a news release cited by Fox 10 and WSFA.
Mayor Spiro Cheriogotis said he learned of the loss on Friday and described the incident as “bad” with no easy remedy. He confirmed that the FBI and the U.S. Secret Service were notified immediately and that the city has engaged a law firm and a forensic accounting firm to conduct its own internal review.
“We are cooperating fully with investigators and taking every available step to recover the funds and bring the responsible party to justice,” the mayor’s release stated. Cheriogotis also noted that Mobile maintains a cyber‑insurance policy, though he warned it is unlikely to make the city whole.
City Council members expressed concern but confidence that services will not be disrupted. Councilman Josh Woods, chair of the Finance Committee, said the city’s “great job” in building financial reserves and expanding a rainy‑day account will help absorb the hit. Councilman Ben Reynolds voiced hope that the federal probe will result in criminal charges.
Assistant Special Agent in Charge Miles Beckner of the FBI’s National Security Branch declined to comment on the investigation but affirmed the agency’s commitment to prosecuting the perpetrators. Former FBI supervisory special agent Darren Mott, now a consultant, called the $14.7 million loss “the biggest” he has seen in a municipal fraud case.
Experts from the Association of Certified Fraud Examiners explained that the scheme likely involved a business‑email‑compromise (BEC) scam, where fraudsters spoof a contractor’s email and send altered wire instructions. Research director Mason Wilder warned that recovery chances drop sharply after 48‑72 hours, and urged municipalities to verify any payment changes directly with contractors.
The loss is comparable to the city’s current budget priorities, matching the annual spending for the Second Line Transit project and the Parks and Recreation Department. However, the Regions Arena budget includes a $15 million contingency fund, which the mayor said will cover the unexpected shortfall and keep construction on schedule.
Mobile is not alone in facing BEC attacks; the FBI reported over $3 billion in compromised‑email fraud nationwide last year, affecting cities, counties and schools. Recent examples include Arab, Ala. ($430,000 loss), Lexington, Ky. ($4 million loss), and Peterborough, N.H. ($2.3 million loss).
What’s next: The city will continue its partnership with federal investigators while the hired law and forensic firms examine internal controls. Mayor Cheriogotis said new procedures will require hand‑delivered checks for payments with multiple commas, eliminating electronic wires for such transactions. Residents can expect no interruption to city services as the recovery effort proceeds.
Sources: fox10tv.com, fox10tv.com, fox10tv.com, fox10tv.com, wsfa.com
