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The City of Arab announced Friday it lost more than $400,000 to a scam. 

City leaders say it happened as a result of one financial transaction with who they thought was an officer representing the contractor building the city's new recreation center. 

The city says it is concerned about the theft of taxpayer funds and is committed to pursuing every available avenue to recover the money and hold those responsible accountable.

As part of the investigation, the city has been made aware that similar fraudulent schemes have recently impacted other municipalities and school systems, and there appears to be a broader pattern of similar incidents occurring across the nation.

You can view the full news release from the city below:

"The City of Arab discovered last week that it was the victim of a sophisticated, socially engineered phishing scheme involving a fraudulent payment connected to the construction of the new Recreation Center.

"An unknown individual or individuals, posing as a legitimate officer of FITE Construction (the contractor building the City’s Recreation Center) successfully misrepresented themselves and caused a fraudulent payment in the amount of $432,739.21 to be issued to the unauthorized entity.

"Upon discovery, the City immediately began an internal review and confirmed that this was a one-time occurrence involving a fraudulent invoice and payment redirection scheme. No private personal data, employee information, or citizen data was accessed, compromised, or obtained. The incident was strictly limited to one financial transaction involving invoicing.

"The City has implemented additional safeguards and enhanced verification procedures to prevent similar incidents in the future.

"This matter is currently under active investigation by the Arab Police Department, the Alabama Law Enforcement Agency (ALEA), the Federal Bureau of Investigation, the Department of Homeland Security and the United States Secret Service. The City is also working closely with its banking institution and the recipient’s bank in an effort to attempt to recover the funds. Additionally, the City’s IT professionals have conducted a review of municipal technology systems and have confirmed that City systems remain secure and operational, while further safeguards have been implemented.

"As part of the investigation, we have been made aware that similar fraudulent schemes have recently impacted other municipalities and school systems, and there appears to be a broader pattern of such incidents occurring across the nation, with indications that the origin of these schemes may be overseas.

"The City of Arab is deeply concerned about the theft of taxpayer funds and is committed to pursuing every available avenue to recover the money and hold those responsible accountable.

"Because this remains an active and ongoing investigation, certain additional details cannot be disclosed at this time. The City will provide additional information as it becomes available through the criminal investigation and as permitted by law enforcement authorities.

"We want to reassure our citizens, employees, vendors, and community partners that this was an isolated financial scheme involving invoice fraud and did not involve a breach of personal or confidential information.

"Mayor Joslin and the City of Arab remain committed to transparency, fiscal responsibility, and the protection of public resources. While this is an ongoing investigation, all questions should be directed to APD Chief Shane Washburn."