SPEAKIN’ OUT NEWS
MOBILE — A $14.7 million payment intended for Mobile’s Regions Arena instead went to a fraudulent entity, leaving taxpayers facing a loss and city leaders confronting questions about how their financial safeguards failed.
Mayor Spiro Cheriogotis announced Monday, October 26, that the city fired one employee and placed two others on paid administrative leave as investigations continue. The FBI and U.S. Secret Service are working with the city to pursue the perpetrators and recover the money.
The mayor said the scheme involved someone impersonating a legitimate vendor, gaining employees’ trust through emails, documents, and phone calls. According to his statement, the city’s information technology systems were not compromised, and the theft did not stem from an employee clicking a malicious link.
“Nothing we have learned suggests this was an ‘inside job,’” Cheriogotis said in a statement reported by NBC 15.
The city has withheld the employees’ names and positions, citing safety concerns. The personnel actions do not establish that those employees participated in criminal activity.
Mobile initially disclosed the loss on October 20. The mayor subsequently said the money disappeared through a single transaction connected to arena construction in early October. He learned of the fraud October 16, according to reporting on his public remarks.
The city has brought in outside legal and forensic accounting assistance to examine what happened.
For residents, the central issue goes beyond the scammers’ identities: How could nearly $15 million leave public accounts without anyone detecting the deception?
Officials have not publicly provided a complete account of how the payment was authorized, the verification procedures used, or whether existing safeguards were followed. Those unanswered questions place the city’s financial controls and oversight at the center of the unfolding investigation.
Cheriogotis has said an approximately $15 million contingency in the arena budget will absorb the loss, allowing construction to continue. He has also acknowledged that future capital projects could be affected if the city cannot close the financial gap.
“It was your money, and we have a duty to protect it,” the mayor wrote in his newsletter, according to 1819 News.
Among the changes announced after the loss: payments of $1 million or more must be made by hand-delivered check rather than electronic transfer, according to reporting on the mayor’s response.
The administration has promised additional information at the Tuesday, October 27, City Council meeting while federal and independent investigations proceed.
As of Monday’s announcements, officials had not established how much, if any, of the stolen money had been recovered.
For Mobile taxpayers, the next test of accountability will be whether city leaders explain the breakdown, identify enforceable corrections, and show how they will better protect public dollars before another payment leaves City Hall.