Mobile, Ala. — (GSN) — The City of Mobile recently revealed that it fell victim to a criminal scheme resulting in $14.7 million in municipal funds being transferred to a fraudulent entity. Local officials are currently cooperating with federal law enforcement agencies, including the FBI and the Secret Service, as the investigation unfolds.

This incident is far from unique. Scams of this nature occur with alarming frequency against municipal governments, school districts, and private businesses across the nation. Sophisticated bad actors frequently target accounts payable departments through spear-phishing, business email compromise (BEC), and social engineering tactics designed to manipulate routine financial transfers.

Accounts payable accountants serve as a vital line of defense in preventing payment fraud and securing organization funds. By adhering to rigorous internal control procedures, AP professionals can stop unauthorized disbursements before they happen. Every accounts payable accountant can help prevent fraud by consistently completing these critical checks:

• Collect Tax Documents: Require a completed Form W-9 (for U.S. vendors) to obtain the legal business name and Tax Identification Number (TIN).
• Screen for Sanctions: Check the vendor against government watchlists and blocked-party lists (such as OFAC) to ensure it is legal to do business with them.
• Verify Banking & Remit-To Details: Independently call or use a secondary verification channel to confirm banking or remit-to address changes to prevent payment redirection fraud.
• Run TIN Matching: Validate the business name and TIN combination via the IRS TIN matching service before entering them into the accounting system.

While these steps do not guarantee vendor safety, they will often trigger a deep search into an entity's background and may trigger law enforcement action BEFORE a financial disaster occurs.

The City of Mobile should be commended for their rapid communication to taxpayers, but this situation clearly shows why human AP accountants with investigative skills are required within these organizations.