Feds recover most of $2 million from scammers impersonating Charlotte-based Rodgers Construction

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The Beaver College of Health Sciences project for which about $2 million was fraudulently transferred. (Appalachian State University image)

A scam where fraudsters impersonated Charlotte-based Rodgers Construction and had Appalachian State University send almost $2 million to a fake company’s bank account ended up costing the university not so much, after federal authorities recovered about 80 percent of the mis-transferred funds.

However, published reports about the 2016 incident – and recovery efforts since – have not indicated whether the culprits have been caught, though apparently the funds were originally transferred to a business which had operated from a Los Angeles, CA residential address.

The Charlotte Observer reports FBI agents successfully tracked down the missing money to accounts at the Bank of America and other financial institutions within a month of transfer. The feds will return $1.54 million to the university, lowering the overall loss to about $400,000.

The story started when the university hired Rodgers to build its new health science college facility in 2016.

The company filed a form with the school to establish wire transfers and direct deposits.

However, that December, a staff member in the university controller’s office received an email purported to be from Doug McDowell, Rodgers Construction’s comptroller.

This email included a new direct deposit form with instructions for the university to route payments to a JP Morgan Chase bank account. And the university then sent the money – only to discover things were going very wrong when the real Doug McDowell contacted the university to ask why Rodgers had not received its money.

Court documents say that the alleged conspirators operated under the name of Royce Hub Trading, which opened a JP Morgan account in late November 2016 with a $100 deposit. The account grew by nearly $2 million on Dec. 12.

406 st. andrews
The Los Angeles address associated with Royce Hub Trading (Google Maps)

Three weeks later, the FBI had located the account and seized the remaining balance of more than $961,000. By mid-January 2017, agents had tracked down another $600,000 through a money-laundering maze of multiple bank accounts and disbursements to an array of companies, the Observer reported.

Corporate records indicate a business named “Royce Hub Trading” in Los Angeles CA was registered on Nov. 21, 2016. The address in the registration documents associates with a three-storey apartment building.

Rodgers is currently finishing up work on the 203,000 sq. ft. Beaver College of Health Sciences academic centre for allied health programs, with specialty simulation labs, classrooms and support space. The project is scheduled to be completed for fall, 2018 occupancy. LS3P is the architect, and Rodgers is the construction manager at risk.

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