An alleged scam resulted in Fresno Unified School District paying $2.2 million to someone pretending to be the district’s largest construction contractor, GV Wire has learned.

A letter to Fresno County from Bryan Martin, an attorney representing Fresno Unified, said two checks from the county on behalf of the district were sent to an account of someone impersonating Davis Moreno Construction.

“In or about February 2024, an unknown individual, posing as a representative of Davis, fraudulently submitted a change of mailing address for Davis,” the letter stated.

Of the $2.2 million, about $1.2 million has already been withdrawn, the letter stated. First Community Credit Union in North Dakota is holding onto the remainder.

A call to Stephen Davis, principal for Davis Moreno, was not returned before publication of this story.

After the change of address for Davis Moreno, the county sent district money for construction to the fraudulent address.

An investigation is underway into the scam.

Martin said in the letter the credit union “appears unwilling” to return the funds until it is released of liability.

“District staff has been working diligently with federal law enforcement to recover the funds,” a district spokesperson told GV Wire. “We have added specific measures to mitigate any reoccurrences.  The district takes these matters seriously and is cooperating fully with the investigation.”

The Fresno County Board of Supervisors discussed the issue in closed session Tuesday.

Calls to Martin for comment were not returned.

Unknown Person Fraudulently Obtains Money

Fresno County holds the district’s bond money intended for construction projects.

A list of construction contracts acquired by GV Wire show Davis Moreno is Fresno Unified’s largest construction partner — earning $224 million across 24 contracts since 2015.

The first check, cashed on Feb. 6, amounted to around $1.2 million, the letter stated. The account holder made two withdrawals later that month, leaving a balance of almost $7,500.

On Feb. 22, the account holder deposited the second check totaling about $1 million and has not withdrawn any of that deposited money, according to the letter. For an unknown reason, however, the holding amount is reportedly about $4,000 short of the original deposit.

After the fraudulent activity came to light, BMO Bank — Fresno County’s bank for those funds — submitted a breach of warranty claim pertaining to the second check. Later, BMO submitted a claim pertaining to the first check.

Both claims included correspondences showing Fresno Unified issued the checks to Davis.

In response, Credit Union offered to release funds “upon the release of the Credit Union.”

“No legal basis or justification was, to our knowledge, provided for this demand of liability release by the Credit Union,” the letter states. “There also was, to our understanding, no reference to any interest earnings on the retained funds, notwithstanding that the Credit Union has held such funds for more than a calendar year.”

City of Fresno Hit by $600,000 Scam in 2020

According to a 2024 Fresno County Civil Grand Jury report, city taxpayers suffered a loss of more than $600,000 in 2020 due to an internet phishing scam.

Although City Hall had previously acknowledged the loss, the grand jury report provided the first details about the scam and singled out city officials for missing red flags signaling fraudulent activity.

Read the report here.