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MIAMI BEACH

OFFICE OF THE CITY MANAGER

NO. LTC #

548- 2016

LETTER TO COMMISSION

TO:

Mayor Philip Levine and Members of the City Commission

FROM:

Jimmy

DATE:

December 21, 2016

L. Morales,

City

Manager/

cJ

SUBJECT: ACCOUNT

This Letter to Commission is to inform you that the City has been the victim of bank fraud with
respect to one of our bank accounts at SunTrust. I learned two days ago that one or more
third parties obtained relevant account information and were able to access the Automatic

Clearing House ( ACH) system through various transactions to illegally have approximately
3. 6 million electronically transferred from our account to other banks. We are working very
closely with SunTrust, who has already submitted claims to the correspondent banks that
received these transfers to have such funds returned. We have also engaged our Miami

Beach Police Department and the FBI to conduct a full investigation. I will inform you as we

receive pertinent, public information, and certainly update you regularly on the status of the
recapture of the funds. The law enforcement agencies involved have advised that we limit any
comments on the investigation pending the results of their work.

We have also taken steps to protect the City moving forward. We have implemented the
following:
Opened new general depository bank account and pending closing current one.
Set up UPIC, a unique account identifier issued by financial institutions that allows
organizations to receive electronic payments without divulging confidential banking
information.

Implemented ACH Fraud Control which allows the City to set parameters for which
ACH transactions are allowed. Gives the City the tools needed to monitor electronic
payments and block unauthorized ACH debits before they post to our account.
Unless pre- authorized, discontinued ACH payments.
Discontinued ACI with MasterCard payments.

Instituted a daily review and reconciliation of all non- check disbursements.


Removed two accountable staff members.

I am personally conducting a full investigation into where our internal controls may have failed
and will take further appropriate measures, when and if necessary.
Please do not hesitate to contact me if you have any questions. I apologize for this situation
the City whole.

and will not rest until we can make