News Summary
Milwaukee almost fell victim to business impersonation fraud, where scammers posed as Scherrer Construction. A fraudulent email led to an incorrect ACH wire transfer. Fortunately, the funds were frozen and returned after an investigation. The city is implementing new safeguards to prevent such incidents in the future.
Milwaukee was nearly defrauded out of $460,866 after scammers impersonated Scherrer Construction, a contractor involved in a Milwaukee Public Library project. The incident, characterized by city officials as business impersonation fraud, began when the city received a fraudulent email in late June requesting a change in the vendor’s bank account information.
The email appeared to come from a legitimate source, using Scherrer Construction’s signature and logo, though the domain was altered slightly from .com to .us. Accompanying the email was a forged bank verification letter aiming to support the request for the change in bank details.
As a result of this deceptive communication, an ACH wire transfer payment was made on July 15 to the scammers’ account instead of the actual vendor’s account. Weeks passed before Scherrer Construction reported not receiving the payment, prompting the City of Milwaukee’s investigation into the matter.
City officials took prompt action once alerted to the issue, contacting the FBI and the Milwaukee Police Department’s Financial Crimes unit. The investigation swiftly commenced to trace the fraudulent accounts involved. Fortunately, the funds were frozen by the scammers’ bank and were subsequently returned to the city about three weeks after the fraud was detected.
Alderman Peter Burgelis highlighted the importance of maintaining accountability, mentioning possible employee error contributing to the incident. In response to the fraud attempt, the city is now implementing additional safeguards. These measures include requiring vendors to provide previous account information before making any changes to their banking details. An internal review is currently underway, which may result in disciplinary actions taken against city employees involved in the process.
This incident is not entirely isolated; preliminary investigations revealed a smaller, similar fraudulent incident from 2024, though details regarding this earlier event remain undisclosed. Authorities suspect that the scammers operating in this case are located overseas, and efforts to hold them accountable are ongoing.
The fraudulent scheme has brought to light the significant vulnerabilities present in financial transactions conducted within local government operations. As cities and municipalities increasingly adopt digital financial practices, the risk of such impersonation schemes is a growing concern that requires constant vigilance and updated security measures to protect public funds.
As Milwaukee moves forward in addressing this situation, the incident serves as a critical reminder of the necessity for robust verification processes in financial dealings with contractors and vendors. The city’s actions will likely influence how other municipalities approach similar risks in the future, emphasizing the imperative for thorough checks to safeguard against fraud in government transactions.
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- WISN News
- Wikipedia: Scamming
- FOX6 Now
- Google Search: Scamming Milwaukee
- TMJ4 News
- Google Scholar: Scamming
- JSON Line
- Encyclopedia Britannica: Scamming
- Cybersecurity Ventures
- Google News: Milwaukee scams
Author: STAFF HERE MILWAUKEE WRITER
MILWAUKEE STAFF WRITER The MILWAUKEE STAFF WRITER represents the experienced team at HEREMilwaukee.com, your go-to source for actionable local news and information in Milwaukee, Milwaukee County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Summerfest, Milwaukee Film Festival, and the Milwaukee Boat Show. Our coverage extends to key organizations like the Metropolitan Milwaukee Association of Commerce and Visit Milwaukee, plus leading businesses in manufacturing and brewing that power the local economy such as Harley-Davidson and MillerCoors. As part of the broader HERE network, we provide comprehensive, credible insights into Wisconsin's dynamic landscape.
