Fresno

Dyer: Fresno’s $400k “African phishing scam” is U.S. based – and worse than reported.

On the heels of the news that the City of Fresno was the victim of a phishing scam, Mayor Jerry Dyer is concerned that the federal investigation into the crime has been compromised due to the news of the scam being leaked from City Hall. 

Dyer held a press conference Thursday to address the situation, revealing that Fresno was the victim of a $613,737 wire fraud scam in 2020 after previous reports had the total around $400,000. 

Dyer took heat from local media earlier this week after McClatchy submitted a Public Records Act request last December for communications between the council and his administration regarding wire fraud, which came back empty. 

The mayor clarified that the public records request came back negative because there were not any emails that exactly matched the request, and he said the city did not disclose the fraud publicly yet at the behest of the Federal Bureau of Investigation, who is conducting an active investigation. 

“There’s nothing more that I cherish as a public official, whether that was my time as a police chief or now as the mayor, than earning the trust of this community,” Dyer said. “Once that trust is violated, I lose credibility as a leader in this organization. And so I want to reiterate, at no time was there ever an attempt to hide information from the public or to deceive any media outlet on public records requests.” 

In April 2020 – when former Mayor Lee Brand was in office – Public Works Director Scott Mozier notified city officials and then-Police Chief Andy Hall that the wire fraud had occurred involving a deal the city had with a contractor to work on constructing the Southeast Fresno police district station. 

The contractor, Bakersfield-based Klassen Corporation, was threatening to walk off the job because of the failure to receive payment. 

It turned out that scammers submitted a nearly identical invoice to the city that Klassen had previously submitted. The lone difference was the bank account information, which the city failed to catch. 

The Fresno Police Department started investigating that April, and in November 2020 the FBI took the case over and informed Fresno police that this was part of a much larger scheme occurring across the nation involving several cities. 

One city involved in the scheme lost twice the amount that Fresno lost, Dyer said. 

When the FBI took over the investigation, city officials were asked to not disclose the information publicly because of fears that it would hinder the investigation. 

Dyer learned of the investigation around one month before he took office in January 2021 and informed the council of it during a closed session meeting that month. 

“Due to the fact that I was coming in as a new mayor, wanted to establish relationships of trust with the council, and in an attempt to be very transparent and put forth the best foot forward, I had made the decision that we were going to share that information with the council and not keep it from them,” Dyer said. 

Later last year, Councilman Miguel Arias sent an email to Dyer’s administration asking for an update on the case and subsequently leaked that email to McClatchy, Dyer said.

“It’s not for me to judge whether that was any type of violation, whether that was any attempt to compromise an investigation, but I do know that ultimately there is a potential for that to occur,” Dyer said. 

Dyer said he spoke with the FBI agent handling the case Wednesday evening now that the fraud had been made public. 

“He was very surprised and extremely disappointed that a federal investigation was now being talked about publicly and was in the headlines, because it had made its way all the way to the East Coast, and he was very confident that the suspects in this case are now aware, unfortunately, of the fact that this is being investigated by the FBI,” Dyer said. 

“So during our conversation, first off I apologized to him. As a public official for the City of Fresno, I felt the need to apologize to him for this leak, because that information was shared with us in confidence. And what was also shared with me that we’re the only city, of all those that were victimized, to share this information publicly – which as the mayor of this city is quite embarrassing. 

“And it serves to not only perhaps compromise a federal investigation and the recovery of funds by these entities, but it also causes us to perhaps lose trust from these other allied agencies, whether it’s local, state or federal. Will they in the future be willing to provide us with information that is confidential knowing that it could very well leak? I don’t know.” 

Dyer said the FBI agent informed him that while there have not been any arrests made yet, the suspects have been identified as Americans, contrary to previous reports that the scam originated in Africa. 

“Had we waited 45 to 60 days to be able to reveal this publicly, it would’ve been a much different news conference. It perhaps would’ve been a news conference where we were celebrating the outcome of an investigation and possibly the recovery of funds for the City of Fresno,” Dyer said. 

“I don’t know what the outcome’s going to be, but I do know that they’re going to continue with this investigation.” 

Daniel Gligich is a reporter for The San Joaquin Valley Sun, focusing on Fresno State Athletics and the southern San Joaquin Valley. Email him at daniel.gligich@sjvsun.com.