Theft investigation underway after millions in federal funds for Lexington transferred to private account

LEXINGTON, Ky. (WKYT) - An investigation into the theft of millions of dollars in federal funds is under investigation in Lexington.

According to city officials, they have asked the Lexington Police Financial Crimes Unit to investigate the electronic theft of approximately $4 million in federal rent assistance and transitional housing funds.

Police believe a person or persons outside the government directed an electronic funds transfer into a private account. The transfer was originally intended for Community Action Council.

They say the initial information shows no criminal involvement of City or Community Action Council employees.

Thursday, city officials say they found out Community Action Council did not receive the funds. The funds were tracked to three wire transfers into a private bank account. That account was frozen by the financial institution Thursday night.

Commissioner of Finance Erin Hensley said the government’s financial system was not compromised. The city is working through the fund recovery process and to help Community Action Council ensure continuity of housing assistance, she said.

This is a developing story.