Miami Beach Recovers Most of Missing $3.6 Million

MIAMI BEACH, FL — Some 15 months after $3.6 million in taxpayer funds was siphoned out of an online account at SunTrust Bank, Miami Beach officials now say that they have recovered nearly all of the missing money. The funds were removed from the city's general account in July 2016. One person was subsequently charged with bank fraud in New York, according to city officials.

“My commitment to our residents was to ensure every dollar was recovered and today’s report by the city manager confirmed we’re nearly there,” explained Miami Beach Mayor Philip Levine in a statement released on Tuesday. “We must always protect our residents’ tax dollars and this served as an important reminder to the city to always safeguard all city accounts.”

Two city employees — Treasury Manager Juan Rodriguez and Financial Analyst Brian S. Wagner — resigned their jobs in the aftermath of the disclosure by City Manager Jimmy L. Morales late last year and the city has instituted more stringent accounting controls. The FBI and Miami Beach police investigated the theft.

Miami Beach officials stressed that no city employees have been implicated in the crime.

"The suspect stole by fraudulently authorizing debits from the city’s account to his personal finances, thereafter using city funds to purchase personal seat licenses for professional sporting events — planning to re-sell seat tickets through online services such as Craigslist and StubHub," according to Miami Beach officials.

The Miami Beach Commission accepted a proposed settlement with STR Marketplace on Tuesday that includes a lump sum payment of $900,000 and a settlement agreement with SunTrust Bank totaling $536,258 along with additional interest through Dec. 31, 2019.

As of Tuesday, city officials said they had recovered $3,499,344 "without protracted and expensive litigation." Officials said they were optimistic they would recover the remaining $187,368 by April of 2018.

"Just as important as recapturing the stolen funds in their entirety, is to ensure a theft never happens again," officials added, saying that the city has adopted 60 recommendations to tighten internal controls.

"Measures taken include several steps, such as implementing ACH Fraud Controls; setting up a unique account identifier issued by financial institutions that allows organizations to receive electronic payments without divulging confidential banking information; instituting a daily review and reconciliation of all non-check disbursements and several other security measures," officials said. "These efforts have ensured that all municipal accounts are secure against future fraud and theft."

In an earlier interview with Patch, Commissioner Kristen Rosen Gonzalez said that she believed SunTrust should have done more to prevent such a large amount from being removed from the city's account over multiple transactions.

Photo by Paul Scicchitano