Arab city officials say they are investigating a sophisticated fraud scheme that resulted in more than $432,000 being diverted during construction of the city’s new recreation center.
According to a statement from Mayor R.D. “Bob” Joslin, the city recently discovered it had been the victim of a socially engineered phishing scheme involving a fraudulent invoice tied to the recreation center project.
Officials said an unknown individual posing as a legitimate officer of FITE Construction — the contractor building the facility — misrepresented themselves and caused a fraudulent payment of $432,739.21 to be issued to an unauthorized entity.
City leaders said they immediately began an internal review after discovering the issue and determined the incident involved a one-time case of invoice fraud and payment redirection.
Officials said no private personal, employee or citizen data was accessed or compromised and that the scheme was limited to a single financial transaction involving invoicing.
“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,” Joslin said in the statement.
Arab broke ground on the new city recreation center in April 2025 as part of an approximately $11 million investment in expanded recreational facilities. The roughly 38,000-square-foot complex will feature multiple courts for basketball and volleyball, spectator seating, locker rooms and multipurpose space for community programs and regional sporting events.
Construction is expected to take about 18 months, with the facility projected to open in fall 2026.
The incident remains under investigation by the Arab Police Department, the Alabama Law Enforcement Agency, the Federal Bureau of Investigation, the Department of Homeland Security and the U.S. Secret Service.
City officials said they are also working with their banking institution and the recipient’s bank in an effort to recover the funds.
Municipal IT staff conducted a review of city technology systems and confirmed they remain secure and operational, officials said. Additional safeguards and verification procedures have also been implemented to prevent similar incidents.
Officials said investigators have identified similar fraudulent schemes targeting municipalities and school systems across the country, with indications that some may originate overseas.
“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,” Joslin said.
City leaders said additional details cannot be released at this time because the investigation remains ongoing.
Sherri Blevins is a reporter for 256 Today.
