KATY, Texas (Covering Katy News) — Fort Bend County Municipal Utility District 35 says approximately $8.2 million in district investment funds were fraudulently transferred through a series of unauthorized transactions.
The district has retained outside legal counsel, and the investigation is ongoing.
"The administrator of the investment pool discovered the irregularities on April 8 and immediately notified the FBI and MUD 35's contracted bookkeeping firm," a statement from the MUD said.
"Through swift action, $3.4 million has been recalled, recovered and returned to MUD 35's investment account. Efforts to recover the entire amount fraudulently transferred remain underway."
MUD 35 says only the investment fund was compromised while the district's traditional banking account remains intact. A spokesperson for the district stated that MUD 35 is "solvent and fully capable of meeting its current debt obligations and operating expenses."
The MUD 35 Board of Directors is cooperating with the ongoing investigation and "hopes to see the remaining funds recovered as soon as possible," according to the statement.
"MUD 35's bookkeeping firm maintains two main financial accounts on its behalf: a traditional banking account for deposits, accounts payable and other withdrawals necessary to support its operating expenses along with an investment account, which includes debt service and operating funds, which earns interest," the statement said.
District officials said the fraudulent transfers targeted funds held by a public funds investment pool.
MUD 35 contains approximately 770 acres of land serving Seven Meadows, Sections 9 through 21, Avalon at Seven Meadows, Sections 1 through 8, and Cinco West at Seven Meadows, Sections 1 through 6. The district contains 2,076 single family residential homes and approximately 32 acres developed for commercial use, including the HEB grocery store on South Fry at Highway 99, and other retail and service establishments.
The district is bounded on the south by Meadowbrook Farms Golf Course and Fort Bend County Municipal District No. 34, on the east by the Cinco Ranch residential development, and on the west by Katy-Gaston Road and Cinco Ranch Boulevard.
Three elementary schools – Bonnie Holland, Griffin and Kilpatrick – are served by the district, along with Beckendorf Jr. High and Seven Lakes High School.
MUD 35
The boundaries of Fort Bend MUD 35.