ERIE, Colo. (CBS4) – The town of Erie recently fell victim to financial fraud after sending more than $1 million to a fake account. According to Town Administrator Malcolm Fleming, officials sent the money to an unknown person claiming to be a construction company the town had hired to build the Erie Parkway Bridge.

Erie Parkway Bridge

Erie Parkway Bridge (credit: CBS)

On Oct. 21, officials said the suspect submitted an electronic form on the town’s website, requesting a change in payment for the bridge’s primary contractor, SEMA Construction, Inc. The form requested an electronic fund transfer instead of a check. Staff checked the form for accuracy, according to officials, but did not verify the change with SEMA Construction.

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Erie issued two payments to SEMA on Oct. 25 totalling $1,016,233.80. The town sent these payments via electronic funds transfer to an account that did not belong to SEMA.

“Once the payments were in that account, the perpetrators of this fraud sent the money via wire transfer out of the country,” said Fleming.

After the bank notified Erie officials about the fraud, the town cut two physical checks for SEMA Construction totaling $1,016,233.80.

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Officials have since removed the form from the town’s website and discontinued vendor payments via electronic funds transfer unless they are verified.

Before the town fell victim to fraud, the Erie Board of Trustees approved the creation of two new positions in 2020: Accounting Manager and Finance Manager. The Trustees also voted to make the part-time Risk Manager position full-time.

“These additional positions will provide additional support, oversight, segregation of duties, and management of the Town’s financial operations, which have expanded significantly in magnitude and complexity as the Town has grown in population,” Fleming said.

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The Erie Police Department is working with the FBI to investigate the fraudulent account. Meantime, officials are working with the town’s insurance providers on a loss claim.