Fresno Unified targeted in check fraud scheme last year. Funds remain unrecovered
Fresno Unified is still trying to recover $2.2 million in stolen funds nearly two years after a fraudster posed as a representative of a general contractor doing business with the district.
The school district disclosed to the Fresno County Board of Supervisors in a March letter that it had yet to fully recover the funds stolen in the February 2024 check fraud scheme. The letter was included in the agenda materials for the board’s Oct. 21 meeting.
Bryan G. Martin, an attorney representing Fresno Unified, told county supervisors in March that district issued two checks through the county meant for Davis Moreno Construction. However, an impersonator fraudulently submitted a change of mailing address for Davis Moreno Construction, and the checks, which totaled $2.2 million, were instead sent to the fake address.
Funds for one of the checks, worth $1.2 million, were almost entirely withdrawn in two separate installments in February 2024.
Another check for $1 million that was deposited that month was not withdrawn and remains an account at the First Community Credit Union in North Dakota, Martin said. He said the credit union has refused to return the remaining funds until it’s released of legal liability.
“Needless to say, these circumstances raise serious concerns for the District, especially concerning the funds the Credit Union is currently holding and appears unwilling to return to the District without such a release,” Martin said in his correspondence.
A law enforcement investigation is underway.
The school district said it’s assessing its protocols in wake of the fraud scheme.
“Our purchasing department has added additional steps in the process of validating vendor contact information. We have made specific changes in business procedures, including additional reviews and internal controls to ensure that similar issues don’t reoccur. The district has provided training to support this new procedure,” said district spokesperson A.J. Kato.
Fresno Unified said in a September 2024 press release it was the target of a check fraud ring earlier that year, jeopardizing $7 million in district funds.
However, $4 million worth of checks were canceled and ultimately protected from being stolen. The district subsequently recovered some additional funds that it had lost.
Kato confirmed to The Bee that the $2.2 million the district has yet to recover is part of the fraud case it disclosed in September 2024.
Stephen Davis, president of Davis Moreno Construction, did not immediately respond to The Bee’s request for comment.
A spokesperson for the California Department of Education called the situation a local issue and said the department “does not have mechanisms in place to monitor or to review financial systems for school districts when they suffer these types of unfortunate losses.”
A representative for the California Association of School Business Officials declined to comment.
