Probe underway into how Derry Council paid almost £100k into bogus bank account

An investigation is under way within the newly formed Derry City and Strabane District Council into how its predecessor, Derry City Council, paid almost £100,000 into a bogus bank account.

News of the scam was given to elected members of the Council’s Audit, Assurance Risk Committee held in the Guildhall this afternoon.

Councillors were told the fraud involved £99,426 being paid into a bank account after a “false representation” was made to amend a supplier’s bank details in February this year.

The meeting heard a company working for the council was due the payment for work carried out as part of an ongoing contract

The payment was approved and paid into what was believed to be firm’s bank account on February 17 but a week later the company contacted Council stating it had not received the payment.

The next day it was found that Council had received notification, purporting to come from the contractor, to change its bank details.

Committee members were told the bank details of the company were then changed to those on the letter received by the council.

It was revealed Council then contacted the company who said they did not request a change of bank details which prompted the Council to contact the bank to have the account frozen and call in the PSNI to have the matter investigated.

The committee was told a full refund was made to the Council on 1 April and “new controls” had been put in place to avoid a recurrence.

A council official revealed an internal management investigation was currently underway within the Council.