Imagine opening your bank statement and seeing money transferred out of your checking account to pay someone else’s bills.
You’d probably notice money disappearing fairly quickly — at least at the end of the month. Unless you’re not paying attention.
It appears that whoever was minding the store at Miami Beach City Hall didn’t notice that someone was stealing money from one of the city’s general use bank accounts. On Wednesday, it was revealed that someone had looted the account of $3.6 million.
If the average taxpayer can balance his or her bank account at the end of the month, then why can’t City Hall?
Authorities are investigating illegal transfers from the city’s bank account at SunTrust Bank.
“Applying it to one’s own household, it’s inexcusable,” said Commissioner Michael Grieco, who said he fielded similar questions from Beach residents. “Is this a product of the systems in place? Is this a product of human error? Those are my questions.”
Whoever did it electronically transferred the money out of a city account through dozens of transactions over what appears to be several months. Automatic payments were transferred to other banks the same way an automated electric bill would be paid straight out of your account.
The large sum missing left elected officials shocked and taxpayers wondering how public money, collected from water and permit fees and used to pay the city’s bills, could be raided like this without being detected sooner.
It’s rampant. It’s nothing unusual. It’s shame that it wasn’t caught sooner, but that’s all.
Commissioner Joy Malakoff, who worked as a banker for 32 years
City Manager Jimmy Morales believes that the city is the victim of fraud and no criminal activity happened inside his finance department. But that won’t be known until Beach police and the FBI finish tracing the fraud.
Even if the money was not stolen by anyone in City Hall, the staggering amount of money lost but unnoticed for a while indicates something went wrong in the city’s finance department.
Ronald Starkman, a South Beach resident and member of two citizen committees that advise commissioners on budgets and audits, was disappointed to read the news Thursday.
“This kind of thing points to a problem with the way that the bank accounts were being controlled,” he said, adding that the audit committee will be convening to review the matter soon.
Apart from the amount of money stolen, the fact that it happened is less surprising. Such bank fraud is not uncommon. With just an account number and routing number, money can be fraudulently transferred.
“The amount of fraud that takes place in the banking system is substantially larger that anyone is comfortable admitting,” said Charles Evans, an associate professor of economics and finance at Barry University.
An expert in finance and online payment systems, Evans said banks have departments dedicated to rolling back fraudulent transactions because it happen so often.
“There are websites out there where people offer bank information for sale,” he said. “It’s actually distressingly inexpensive.”