David J. Miller of New York was indicted in federal court last week for allegedly stealing $3.6 million from the city of Miami Beach.
Miller, 45, faces 20 counts of bank fraud, one count of access device fraud, and one count of aggravated identity theft. He was arrested in Syracuse, New York on unrelated identity theft charges on May 31. Sources say he is going to be transferred to Florida for his arraignment. The press did not name an attorney for him.
According to the indictment, Miller allegedly stole another man’s identity and set up an account with a website that offers “personal seat licenses” to people who want to buy tickets for sporting events. Miller then somehow acquired the details for a Miami Beach bank account and began transferring money from the account to buy seat licenses and pay his utility bills in Syracuse, the indictment claims.
The city bank account contained money collected from water bills and permit fees, and was used to pay government bills and other city expenses. Miller reportedly transferred money from the account on 19 different occasions in increasingly large payouts. The first transfer of $7,511 was made in July 2016; it was followed by two more transfers of $19,340 and $97,300 in August. The transactions culminated with a $325,000 transfer on October 17, 2016, which Miller allegedly used to buy expensive sports tickets.
The city’s finance department did not notice the fraudulent transactions until December. The account was immediately closed and a criminal investigation was launched. A report published earlier this year by a consultant hired by the city concluded that insufficient staffing, poor management, and issues with adapting to newly installed software collectively contributed to the city’s failure to detect the transfers earlier.
City Manager Jimmy Morales fired two mid-level managers in the finance department once the scandal became public knowledge in December 2016. He said he doesn’t believe the city’s staffers are to blame, but they should have noticed the unauthorized transfers sooner.
“I don’t think we could have prevented this, but we should have caught it sooner,” City Manager Jimmy Morales told the press in December. “This was not just one month of activity. We probably should have caught it earlier, and I’m trying to figure out if we did something wrong and where that happened.”
Sources say the city sent claims to the banks that received the transfers to try and get the funds returned. Just over half of the stolen funds have been recovered as of June this year. The city’s finance department has reportedly hired new staffers and implemented a series of controls recommended by the consultant to ensure this type of fraud does not occur again.
Bank fraud encompasses a wide array of banking offenses, including check fraud, ATM deposit fraud, credit and debit card fraud, internet banking fraud, loan application fraud, and identity theft. It is punishable by up to 30 years in prison, a $1,000,000 fine, or both. Prosecutors can charge a defendant with multiple counts of bank fraud for every instance of alleged criminal conduct.