LEXINGTON, Ky. — The city of Lexington has recovered all of the funds that were stolen in an electronic theft this week, Mayor Linda Gorton said Friday.

What You Need To Know

  • Lexington has recovered stolen federal housing funds that were reported missing on Monday

  • The missing funds totalled $3,905,837.05

  • An investigation into the theft by local FBI and Secret Service offices is still underway

The missing money – $3,905,837.05 in total– was seized from a private account and refunded to the City today. The funds had been diverted into a private account by unknown criminals.

The city originally intended to transfer the federal rent assistance and transitional housing funds to the Community Action Council. In a press release, Gorton said the theives "inserted themselves into electronic communication between the City and Community Action and provided false transfer information."

“The Lexington Police Financial Crimes Unit, several financial institutions, our Departments of Finance and Information Technology, and local FBI and Secret Service offices have played pivotal roles in the recovery of these funds,” Gorton said.

An investigation into the theft by local FBI and Secret Service offices is still underway, city officials said. The FBI is conducting a criminal investigation; the Secret Service is investigating the electronic transfers.

Sgt. Brad Williams, who leads the Police Department’s Financial Crimes Unit, said the city is fortunate to recover the funds.

“This kind of theft is all too common everywhere,” Williams said. “We are fortunate to find this money. Often, the funding cannot be recovered.”

Secret Service investigators will also be examining city procedures. The government's financial system was not compromised, city Finance Commissioner Erin Hensley said earlier this week.