The City of Liberty, Texas has been defrauded of approximately $600,000 in a sophisticated wire transfer scam, and federal investigators are now involved.
City officials say Liberty was the victim of a fraudulent wire transfer after receiving a payment request through an email address designed to closely mimic a legitimate vendor the city owed money to. The scam, known as a business email compromise or lookalike domain attack, tricked city staff into wiring the funds to a fraudulent account.
The city’s bank was alerted by the receiving bank that the transfer appeared potentially fraudulent, but by then, the payment had already gone through.
Officials say the scam was particularly convincing because the city had a legitimate outstanding debt to the vendor in the same amount as the transfer. That real obligation made it harder for staff to immediately recognize the request as fraudulent.
The city says its internal computer network was not compromised. The incident appears to have originated entirely from an outside source that created a fake email domain designed to look like the vendor’s real address.
The Liberty Police Department is working with federal law enforcement agencies on the investigation. The city says no legitimate party involved in the original debt, including the city itself, the vendor or any of the city’s consultants, is suspected of wrongdoing.
Liberty has filed a claim with its insurance carrier related to the cybersecurity incident and says it has strengthened its vendor payment verification procedures. The city says it will continue to cooperate fully with federal law enforcement.
Due to the ongoing investigation, officials say they cannot provide additional details at this time.
