LEXINGTON, Ky. (FOX 56) – Officials at the local and federal levels are continuing an investigation regarding the electronic theft of $4 million dollars.

The funds were allocated for federal rent assistance and transitional housing for Lexington residents.

Mayor Linda Gorton announced on Tuesday that the Division of Internal Audit will complete an in-depth examination of the city’s wire transfer processes.

“The government is a victim of a crime at a time when it is partnering with agencies across the community to provide critical financial assistance,” Gorton said. “Cybercrime is a growing problem around the world. We must be sure government employees are well trained to detect it.” 

Gorton stated the investigation thus far indicates no criminal involvement of city or Community Action Council employees.

A press release from Gorton explained that those responsible for the thefts posed as the Community Action Council through digital communication. The city, not knowing their communication was in fact not with the actual Community Action Council, sent three wire transfers totaling $4 million to a fake bank address provided by the scammers.

Recovery efforts are underway to continue aiding the Community Action Council with housing assistance.

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An investigation into the theft of millions of federal funds in Kentucky was announced Friday.

The Office of the Mayor and the Lexington-Fayette Urban County Government have asked the Lexington Police Finacial Crimes Unit to investigate the electronic theft of about $4 million in federal rent assistance and transitional housing funds.

In a news release, the city said police believe a person or persons outside the government directed an electronic funds transfer into a private account.

“The transfer was originally intended for Community Action Council,” the release said.

On Thursday, the city found out that the Community Action Council did not receive the funds. The funds were tracked to three wire transfers into a private bank account.

The account was frozen by a financial institution Thursday night.

The government’s financial system was not compromised, according to Erin Hensley, commissioner of finance.

“The city is working through the fund recovery process and to help Community Action Council ensure continuity of housing assistance,” she said in a news release.