Funds

Woman indicted in connection with theft of millions in federal funds meant for Lexington

LEXINGTON, Ky. (WKYT) – A Texas woman has been indicted by a federal grand jury in connection with the theft of millions of dollars in federal funds from the City of Lexington.

The U.S. Attorney’s Office says 24-year-old Shimea Maret McDonald, of Houston, Texas, is facing charges of conspiracy to commit money laundering, providing fraudulent statements to a federally insured financial institution, and identity theft.

According to the U.S. Attorney’s Office, McDonald conspired with others to engage in business email compromise scams.  More specifically, the conspirators targeted business or municipal entities that had ongoing financial relationships with other vendors who were owed current or future payments by the entities.

The conspirators then impersonated the vendors in email communications with the targeted entities and requested wire payments to a new bank account, one opened in the name of Gretson Company LLC.

The U.S. Attorney’s Office says McDonald and her co-conspirators opened three bank accounts under Gretson Company LLC, which was a shell company established in Texas by managing member K.N., whose identity had been stolen. McDonald and her co-conspirators would then attempt to withdraw the funds in a variety of payment methods to quickly move the funds elsewhere.

The indictment further alleges that, in August 2022, the conspirators impersonated a nonprofit organization having business with the City of Lexington over email and convinced a City official to wire funds owed to the non-profit organization to a bank account at Truist Bank. The City wired a total of $3,905,837.05 to the Gretson Company LLC bank account at Truist Bank.  

The U.S. Attorney’s Office says, prior to the August 2022 wire transfer, McDonald, using the identity of K.N., had requested eight counter checks from Truist Bank, which would be funded from wires fraudulently received from the City. Then, when the money was placed in the fraudulent account at Truist Bank, McDonald, using the identity of K.N., attempted to deposit a portion of these funds into another account in the name of Gretson Company LLC, at another financial institution.

Ultimately, Truist Bank and the City of Lexington were able to recover all the funds that were transmitted.

McDonald will appear in Court on Tuesday, February 7 at 10 a.m. She faces up to 20 years on the count of wire fraud; she faces up to 30 years for the count of bank fraud; she faces up to two years, to run consecutively on each count of aggravated identity theft; and she faces judgments for restitution and forfeiture of the property attained through the fraud.

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