News Summary
Baltimore has lost over $1.5 million due to a fraud scheme involving fake electronic funds transfers within its accounts payable department. Despite recovering a portion, significant financial vulnerabilities in the city’s financial controls have been exposed. An investigation by the Inspector General revealed serious lapses in internal controls and the need for enhanced fraud prevention measures to protect taxpayer money.
Baltimore, MD – A major fraud scheme has resulted in a loss of more than $1.5 million from the city of Baltimore, marking a significant breach of financial security within the municipal accounts payable department. The fraudulent activities involved the manipulation of electronic funds transfers (EFT) that were executed under the guise of a legitimate vendor.
The fraudulent scheme consisted of two electronic funds transfers totaling $1,524,621.04 that took place between February and March 2025. Payments included a transfer of $803,384.44 and another for $721,236.60. While the city managed to recover the smaller sum of $721,236.60, the larger amount remains unrecovered.
The scam was executed when the fraudster, using a fake email address, gained access to the vendor’s Workday account. Subsequently, they altered the banking information without the necessary verification processes in place. An investigation revealed that an accounts payable employee prematurely approved the fraudulent supplier form, despite false information being provided. Further complicating the situation, a fake voided check was submitted by the fraudster in January 2025 to facilitate changes to the bank details.
Following this, two more accounts payable employees approved the fraudulent bank change request without adequate document verification, highlighting a serious lapse in internal controls and fraud prevention protocols within the city’s financial department.
Isabel Mercedes Cumming, the Inspector General responsible for the investigation, emphasized the insufficient safeguards present within the accounts payable department. The department had not implemented corrective measures after facing similar fraudulent incidents, leaving the city particularly vulnerable to such attacks.
This is not the first time Baltimore has encountered incidents of vendor scams. In 2019, the city suffered a loss of $62,000, and in 2022, it faced a further loss of $376,000 due to similar fraudulent activities aimed at changing bank details. Additionally, Baltimore experienced ransomware attacks in March and May 2019, raising concerns about the overall security of the city’s financial infrastructure.
The scheme represents a textbook case of Business Email Compromise (BEC), a type of cybercrime characterized by deceptive practices aimed at altering payment processes. These attacks typically involve impersonating a company executive or vendor to prompt changes in banking information, leading to significant financial losses.
The investigation has brought to light crucial issues regarding the city’s internal controls and its approach to fraud prevention. With the accounts payable department’s evident weaknesses, there is an urgent need for enhancing security measures and oversight to prevent similar incidents in the future.
As the city of Baltimore continues to address these vulnerabilities, the quest for recovering the lost funds and protecting taxpayer money remains a top priority. The recent fraud case serves as a stark reminder of the importance of stringent verification processes and robust fraud prevention strategies.
Deeper Dive: News & Info About This Topic
HERE Resources
Baltimore Developer Files for Bankruptcy Amid Financial Woes
New Jersey Doctor Charged with Opioid Distribution and Fraud
Doctor Charged in Opioid Distribution and Healthcare Fraud
New Jersey Doctor Charged with Sexual Solicitation and Fraud
Physician Charged with Distributing Opioids for Sexual Favors
Doctor Charged with Medical Fraud and Sexual Exploitation
Baltimore Woman Charged in Waynesboro Check Fraud Case
Additional Resources
- MSSP Alert: Human Security Acquires Clean.io
- Wikipedia: Business Email Compromise
- MSSP Alert: Baltimore City Fraud Scheme
- Google Search: Fraud Prevention Strategies
- MSSP Alert: Baltimore Vendor Scam Loss
- Google Scholar: Fraud Detection Internal Controls
- MSSP Alert: Cybersecurity Concerns in Baltimore
- Encyclopedia Britannica: Fraud Prevention
- MSSP Alert: Electronic Funds Transfer Fraud
- Google News: Baltimore Fraud Scheme
Author: STAFF HERE BALTIMORE WRITER
BALTIMORE STAFF WRITER The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore 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 the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.
