About four months have passed since the revelation that $3.6 million had been siphoned from a city bank account, a theft that went unnoticed by the City Hall’s finance department during the six months that it was going on, and now city officials say about half of the money has been recovered.
City Manager Jimmy Morales reported this week that $1.8 million has been recovered so far — $726,435 in the last month. In a memo to commissioners, he said law enforcement has helped the city recover the money.
“The administration continues to work with with the U.S. Attorney’s office, the FBI and Miami Beach police to aggressively recapture all the funds,” he wrote. Morales declined to answer more specific questions by the Miami Herald, including how and where the last $726,435 increment was recovered, citing the open criminal investigation.
Miami Beach police would only confirm that no arrests have been made and that the investigation is still active.
The money was stolen from the city’s SunTrust Bank account through fraudulent automatic payments over the course of six months last year. Someone used the city’s bank account information to set up transfers the same way one would arrange automatic payments from a checking account to pay regular bills.
After the theft was uncovered in December, two employees in the finance department resigned. Morales has said they are not suspected of theft, but they should have noticed the fraudulent transfers earlier. The city’s chief financial officer Allison Williams demoted herself. The city named former budget director John Woodruff the new CFO in February. Woodruff recently filled two new financial analyst positions created this year.
Two financial consulting firms are studying the finance department’s internal controls and procedures.
The account that was plundered holds dollars collected from resorts taxes, parking fees, red light camera fines and liens. Its daily balance ranged from $46 million to $144 million. The city immediately closed the account when the theft was detected in December and opened a new one with fraud control.