Arizona Department of Housing Accidentally Transfers $2 Million to Fraudulent Actors
The Arizona Department of Housing recently made headlines for mistakenly transferring $2 million to fraudulent actors in 2023. The agency only discovered the alleged fraud six months later, according to an audit report released on Tuesday.
The state agency, responsible for funding and overseeing affordable housing projects, faced criticism from the Arizona Auditor General for lacking policies that could have detected such a substantial loss from the State Housing Trust Fund.
In June 2023, the department wired $2 million to individuals impersonating officers from a title company and a nonprofit organization that the agency was collaborating with to purchase properties for affordable housing programs.
It wasn’t until December 2023 that the department realized the nonprofit organization had not received the funds, prompting them to notify the FBI. The audit report revealed that the department initiated an insurance claim to recover the losses from the wired funds, and the auditor general’s office is currently investigating the matter further.
In response to the audit, the housing department has implemented new policies and procedures to prevent future incidents of wire fraud. These measures include a secure method of obtaining and verifying wire transfer instructions.
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