NEWPORT — Liberty Lake has been tasked with investigating a recently reported web-based scheme that resulted in the wrongful transfer of $330,000 of city funds.

Newport announced in late February that the city was the victim of the web-based scheme that resulted in the wrongful transfer of city funds. Officials alerted local, state and federal law enforcement agencies and launched an immediate investigation into the incident.

The matter, which happened around Feb. 11, remains under active investigation, Newport officials said.

“This is a deeply concerning situation,” Mayor Keith Campbell in a Feb. 24 press release. “We recognize this could represent a significant loss of taxpayer dollars. We take our responsibility to safeguard public funds extremely seriously.”

Preliminary findings indicate the funds were obtained through a sophisticated online scam.

City officials said there is no evidence that residents’ personal information was compromised, adding the scheme appears to be limited to municipal financial transactions.

In addition to the criminal investigation, Newport officials said they have initiated a comprehensive review of internal financial controls, policies and procedures. City officials have also begun identifying and implementing additional safeguards for electronic payments and vendor verification processes.

Campbell said city officials will provide updates as appropriate while maintaining the integrity of the investigation.

Newport is the latest city to be hit by online scammers, with Clark Fork losing more than $480,000 in November 2023 after the city mistakenly transferred funds to a scammer impersonating a construction contractor’s manager.

The fraud occurred when Clark Fork officials paid a bill for excavation work associated with improvements to the city’s drinking water infrastructure. The city soon discovered it had mistakenly transferred funds to a scammer impersonating the excavation firm’s manager. Ultimately, Clark Fork was able to recover about $192,937.22 of the total $483,519.12 that had been misdirected to a threat actor.

The Clark Fork incident remains under investigation by the FBI.

As a result, the city’s officials said a possibility remains that additional funds may be recovered. However, a timeline for that investigation is uncertain.