Investigation continues into major theft of federal funds in Lexington

LEXINGTON, Ky. (WKYT) - Mayor Linda Gorton says a review is underway after an investigation into the theft of $4 million in federal funds.

The money was meant to be transferred to the Community Action Council for federal rent assistance and transitional housing funds, and it comes at a time when more people are turning to help to pay for their home.

One woman talked to us about how the theft could personally impact her.

“It’s scary. I mean I’ll be honest with you. I am terrified. I have never, I mean I’m 71 years old, and I have never been forced with a situation like this where I’m not going to have a home,” Lucy Grillo said.

For the last eight years, Grillo has lived in a mobile home off Eastland Drive in Lexington. With rising rent costs and her fixed income, she now can’t afford to be there and has to be out by Thursday.

“When I moved out here, I decided this was probably going to be the last place I was going to move, until I went to the funeral home. But you know, that’s been shattered, too,” Grillo said.

After weeks of searching, the retired substitute teacher still can’t find any affordable house in the area.

“People work here and not all of us make a great deal of money. Especially schoolteachers, you know?” Grillo said.

She’s sharing her story because she knows she’s not alone in her search.

“My self-confidence is just shot down to nothing,” Grillo said.

While so many are desperately trying to find affordable housing, police and local FBI are investigating the theft of the money. In a statement, a city spokesperson says they believe this was a scam where an outside source inserted themselves into communication between the city and Community Action Council. They said city employees received an email from a sender they thought was Community Action Council with new bank information, not realizing the bank information was bogus, and the city sent three wire transfers totaling $4 million to the fake bank address.

While the investigation into the theft continues, people like Grillo still have to find somewhere to live.

“If they have any place to rent, you know, please think of me. It’s all I can ask,” Grillo said.

Right now, investigators don’t believe there was any criminal involvement by city or council employees. The city said they’re working through the fund recovery process now.

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