News Summary
Milwaukee city officials have successfully recovered $460,866 lost to a fraudulent scheme that impersonated a legitimate construction company. The incident, which targeted funds for the renovation of the Milwaukee Public Library’s Martin Luther King Branch, was discovered after the real vendor noticed payment was not received. Immediate actions led to the freezing of the fraudster’s account, allowing for the recovery of stolen funds. The city is strengthening its verification processes to prevent future incidents and ensure protection of taxpayer dollars.
Milwaukee city officials successfully recovered $460,866 that was lost due to a fraudulent scheme that involved the impersonation of a legitimate construction company. The illicit activity was discovered in July and prompted immediate action to address the breach.
The scam specifically targeted a payment intended for the ongoing $38 million renovation of the Milwaukee Public Library’s Martin Luther King Branch. The fraudsters impersonated Scherrer Construction and managed to deceive the comptroller’s office into rerouting funds to a fraudulent account.
The fraudulent payment, made on July 15, followed an alteration in the payment instructions, which typically requires strict verification processes, including a bank verification letter. In this instance, the verification document was forged, allowing the scammers to redirect a significant sum of money.
The scheme went unnoticed until the actual construction company reported they had not received the payment, alerting city officials to the problem. City Comptroller Bill Christianson described the incident as a “deceptive scheme” wherein criminals impersonated a legitimate vendor, which is particularly concerning given the amounts of money involved.
Initially, expectations for recovering the funds were low, as the Milwaukee Police Financial Crimes Unit expressed skepticism about retrieving the money. However, in a surprising turn of events, less than two weeks later, detectives notified the comptroller’s office that the fraudster’s bank had frozen the account in which the stolen funds were deposited and was preparing to return the money.
Detectives Chad Vartanian and Tony Castro, leading the investigation, have reported that the suspects are likely located overseas, complicating further actions against them. The city is not only focused on recovery but is also implementing measures to prevent future incidents. Following this incident, city officials have introduced stricter verification processes, such as requiring vendors to confirm their previous account details directly and ensuring a phone conversation occurs with the vendor’s representative before any account changes are made.
An internal review of the comptroller’s office systems was initiated as a response to the incident, with potential disciplinary actions being considered for involved staff. In a further investigation, a smaller fraudulent payment from 2024 was discovered, which is still under scrutiny by the authorities.
To enhance public safety and vigilance, the Milwaukee Police Department continues to encourage residents to report any information related to this case or the suspects involved in the scam. Overall, while the immediate funds have been recovered, the city remains committed to reinforcing its defenses against fraud to protect taxpayer dollars in the future.
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Additional Resources
- WISN: Milwaukee Police Recover $460,866 Payment Made by City to Scammers
- Wikipedia: Fraud
- JSONLINE: Milwaukee Police Recover $460,000 in Thwarted Fraud Against the City
- Encyclopedia Britannica: Fraud
- Fox6Now: Milwaukee Recovers Nearly $461K After Fraud Scheme Targets City Vendor
- Google Search: Fraud Schemes
- WTMJ: Over $460,000 Recovered from Fraud Scheme Targeting Milwaukee Government Operations
- Google Scholar: Preventing Fraud
- Daily Reporter: Milwaukee Contractor HubZone Fraud
- Google News: Milwaukee Fraud
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.
