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Scott County Council reviews fraud case after altered county check cashed in Louisville
Summary
Council members described a Dec. incident in which a mailed county check was intercepted, altered and cashed in Louisville; staff outlined steps taken (positive‑pay, stop‑payment, reissue), said the bank reimbursed the county and asked the council to push for outside-jurisdiction investigation and SBOA review.
Scott County Council members reviewed an incident involving an altered county check and outlined steps the county has taken to tighten payment controls.
At the Jan. 13 meeting, the chair summarized the case: “So, basically, a person in Louisville removed a check that was mailed from us to Louisville. They changed the amount on it, and they changed it down, thankfully,” the chair said. County staff said the altered check was cashed in Louisville and the bank ultimately reimbursed the county for the fraudulent transaction.
County Treasurer Ryan Gabbard and audit staff described how the discrepancy was discovered quickly through check-image review and a makeshift positive‑pay process with the bank. Staff said they stopped payments on affected items, reissued checks and are moving more payments to ACH to reduce mailed-check exposure.
Council members raised jurisdictional concerns: the theft was committed in Louisville, Kentucky, so local Scottsburg law enforcement lacks jurisdiction to investigate the point of cashing. A council member urged staff to notify Louisville Metro Police Department and to follow up with the State Board of Accounts (SBOA) so the SBOA can review internal controls under Indiana law.
Staff said the bank (Westbank) had made the county whole for the fraudulent $3,500 check, but several county employees experienced frozen checks and related fees that the county intends to review for reimbursement where substantiated. County auditors described upcoming system changes aimed at reducing risk, including fuller positive‑pay enrollment with the bank.
The council asked staff and the county attorney to follow up with Louisville investigators and the SBOA and to return with documentation of actions taken and any recommended policy changes.
