Auditor Uncovers One of the Largest Embezzlement Schemes in Past Decade

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JACKSON, Miss. – Today State Auditor Shad White issued a demand to former Bay Springs City Clerk Randy James for suspected embezzlement. Interest and investigative costs are included in the $325,561.84 demand letter. This case ranks as the ninth largest demand for embezzlement in the last decade in Mississippi.

The investigation revealed James was duped by international scammers to divert city funds overseas in hope of winning money in a lottery scheme. At the direction of the scammers, James created a secret bank account and transferred money to it from the city by creating and paying fraudulent invoices from fictitious companies for services which never occurred.

From August 2017 to April 2018, James complied with international scammers by transferring funds in increments of $1,950 to $50,000 to the secret bank account. He then wired that money to scammers. Local bank officials became skeptical of the transfers initiated on behalf of Bay Springs by James and reported the transfers to city leaders.

Approximately $300,000 was stolen from the City of Bay Springs in less than one year. The most recent financial report submitted by the city to the Auditor’s office indicates an annual budget of approximately $2.7 million.

“This loss is massive for a town the size of Bay Springs – over 10% of their annual budget. Our small towns cannot afford to lose a single penny right now,” said State Auditor White. “My office will work to hold fraudsters like Randy James, who knowingly steal your money, accountable with zero tolerance for this kind of theft.”

A $50,000 surety bond covered James during his employment at Bay Springs. A surety bond functions as an insurance policy for taxpayers against embezzlement and fraud by public officials. The bond improves the chance for taxpayers to recover stolen public money.

James remains subject to potential criminal prosecution. He is presumed innocent until allegations against him have been proven in a court of law.

Fraud, embezzlement, and other public corruption can be reported to the Office of the State Auditor online any time by clicking the red button at www.osa.ms.gov or via telephone during normal business hours at 1-(800)-321-1275.

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