FBI investigation continues into phishing scam involving Fresno

FRESNO, Calif. (KFSN) -- More than two years after the City of Fresno was defrauded almost $614,000 in a phishing scam, Mayor Jerry Dyer detailed what he could about an ongoing FBI investigation.

He said, "At no time was there any attempt to be deceptive, to deceive the public, or to withhold information."

It was January of 2020 when the city paid, what was believed to be the contractor of the police department's southeast station, around $324,000.

"The invoice that was submitted was nearly identical with the exception of the bank account information of where the money was to be transferred to," said Mayor Dyer.

That would be the first of two invoices paid. The second was to the tune of $289,000 in March.

RELATED: Fresno officials speak on $400K phishing scam; losses won't be recovered

It was that April, Fresno Police were made aware of potential fraud.

By November, the FBI took over, alerting the city that Fresno wasn't the only victim of a much larger phishing scam involving two other cities across the US.

Each city was targeted by the scammers for having recently entered into an agreement for a construction contract.

According to Mayor Dyer, then-Mayor Lee Brand and then-City Manager Wilma Quan were asked to not disclose at the request of the FBI.

He said, "They had good leads at the time and it could impact the ability to recover the funds taken from the City of Fresno."

Mayor Dyer says the investigation has ruled out any internal involvement in the scam, adding the investigation is still active and ongoing.

He says warrants have been secured for the bank accounts involved -- all are based in the United States.

While the City of Fresno has fraud insurance, it only covers $250,000 with a $50,000 deductible.

"It's a lot of taxpayer dollars that were stolen from us. We haven't given up on trying to recover those dollars," said Mayor Dyer.

Dyer addressed concerns regarding public records request made last year.

It asked for any city communication surrounding the wire fraud but not all emails were disclosed, including one asking about the progress of the case to the city manager and attorney.

Dyer says, "That councilmember provided that email to a local reporter. We're the only city of all those that were victimized to share this information publicly, which as the mayor of this city, is embarrassing."

Councilman Miguel Arias says Mayor Dyer has taken action to ensure additional safeguards so that this doesn't happen again, but more needs to be done to involve council.

He says, "I think the discussion for the council is how do we publicly recognize when we're victims of fraud? Because in this case, we weren't told until this week that it was recognized by the city in the 2020 report that none of us were aware of."

Former Mayor Lee Brand says his administration was aware, but chose not to disclose per the FBI's request, saying it would compromise the integrity of the case, the other cities involved and the chance of getting that money back.

City leaders also want to use this as a reminder that phishing scams can happen to anyone.
Copyright © 2022 KFSN-TV. All Rights Reserved.