Milwaukee recovers nearly $461K after fraud scheme targets city vendor

Milwaukee recovers nearly $461K after fraud scheme

Scammers nearly stole $460,866 from Milwaukee by impersonating a city vendor.

MILWAUKEE - Nearly half a million dollars in taxpayer money was almost lost to a sophisticated fraud scheme targeting the City of Milwaukee.

What we know:

Police say scammers impersonated a city vendor and tricked officials into rerouting a $460,866 payment to a fraudulent account. 

Milwaukee Comptroller Bill Christianson said someone pretended to be Scherrer Construction, a contractor working on a Milwaukee Public Library project.

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"The city was victimized by a type of fraud called business impersonation fraud," Christianson said.

In late June, an email arrived requesting a change in bank account information.

"It had the signature, logo of the company’s email address with one key change," Christianson said. "Instead of .com at the end it was .us."

Weeks later, the legitimate vendor reported not receiving payment, even though city records showed otherwise. That’s when Christianson contacted the FBI and the Milwaukee Police Department.

"I want to make sure I applaud the work of the Milwaukee Police Department, their financial crimes unit, as soon as we contacted them they were on top of this and they traced the accounts," he said.

Dig deeper:

Christianson said MPD believes the culprits are overseas. He said their bank froze the funds, which made it easy to be transferred back to the city.

Alderman Peter Burgelis said accountability is needed.

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"My understanding is that an employee made a really dramatic mistake… intentionally or not," Burgelis said. "This could have been a half a million dollar impact to the city’s financial condition which would have been devastating to our pocketbooks."

Milwaukee City Hall

Christianson said the city is implementing safeguards, including requiring vendors requesting bank changes to provide their old account information.

An internal review is underway, which could lead to disciplinary action.

He also revealed this investigation uncovered a smaller, similar incident in 2024. Because that case is ongoing, details have not been released.