A Houston woman has been indicted by a federal grand jury on charges of fraud and other laundering-related offenses after she is said to have defrauded the city of Lexington by portraying herself as a member of a local nonprofit seeking money from the city.
Shimea Maret McDonald, 24, is alleged in the indictment to have conspired with others to engage in business email compromise scams, the U.S. Department of Justice said in a news release Monday. She faces one count of conspiracy to commit money laundering, one count of providing fraudulent statements to a federally insured financial institution, and three counts of identity theft.
According to the indictment, the conspirators targeted business or municipal entities which had ongoing financial relationships with other vendors who were owed current of future payments by the entities. The group would impersonate vendors in emails with those entities and request wire payments to a new bank account, one opened in the name of Gretson Company LLC.
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, the indictment alleges. The group then attempted to withdraw the money in a variety of payment methods, to quickly move the money elsewhere.
In August, McDonald and others impersonated a nonprofit organization having business with the city of Lexington over email and convinced a city official to wire money owed to the non-profit organization into a bank account at Truist Bank, according to the indictment.
Lexington government officials wired more than $3.9 million to the fake bank account at Truist Bank, according to the indictment. 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 of Lexington.
Then, when the money was placed in the fraudulent account at Truist Bank, McDonald tried to deposit a portion of the money into another account in the name of Gretson Company LLC, at another financial institution, according to the indictment.
The city previously confirmed that in August, it discovered the theft of nearly $4 million that was meant for the Community Action Council and asked police to investigate. The case was investigated by Lexington police and the FBI, according to the DOJ. The city said that the money was traced to three wire transfers into a private bank account and that the account had been frozen at that time.
That theft was discovered when the city learned that the Community Action Council had not received the federal rent assistance and transitional housing funds.
Truist Bank and the city were able to recover all the funds that were transmitted, according to the DOJ.
McDonald will appear in court on Tuesday at 10 a.m. She faces up to 20 years on the count of wire fraud, 30 years for the count of bank fraud, two years on each count of aggravated identity theft, and judgments for restitution and forfeiture of the property attained through the fraud.