OCALA, FL (352today.com) – The City of Ocala has recovered the bulk of the money lost in a business email compromise fraud, receiving a $250,000 insurance check and limiting the net loss to about $27,000- $28,000, according to Ocala City Manager Pete Lee.

At the Ocala City Council meeting on Tuesday, August 18, 2026, Lee presented a detailed report on the incident during the city manager’s report portion of the meeting. He said staff from IT procurement, the internal auditor’s office, the Ocala Police Department, risk management and other departments collaborated on the document after the fraud came to light.

“They all worked together after I found out about this incident to put this together, and as you know, we got the bulk of the insurance money back, $250,000. We got the check today, so it was a 27 to $28,000 loss at the end of the day,” Lee said. “Two employees are no longer with us as a result of this.”

Lee credited several staff, including Chris Watt, chief of staff for the City of Ocala, along with city Risk Manager Richard Dennis, for their work.

Watt told the council that mistakes were made and that several changes to procedure have been put in place to prevent a repeat.

“Mistakes were made, and there have been several changes to procedure that have been put into place to prevent this from happening again,” Watt said. “Just one thing I would like to say, though–if the procedures that the city had in place at the time that we put in place in 2019, as most of you would recall, this happened one other time. This would not have happened. The procedures would have worked if they had been followed, and it would have stopped this from happening. Unfortunately, the employee did not follow the procedure that was in place, and that’s what prompted this loss.”

The newer safeguards are “a lot tougher now,” he added, with more oversight. Watt and Dennis also worked to secure strong insurance coverage so that a roughly $277,000-$278,000 exposure became a much smaller net hit of $27,799.

Lee said the city deliberately withheld public details until the report was complete and delivered to council members. Copies of the report were placed in front of each council member’s seat, along with other materials from the prior week’s city manager’s report and public comment. He invited members to raise questions with him individually later if needed.

The discussion marks a follow-up to the August 4, 2026, council meeting, when Councilman Jim Hilty publicly pressed Lee over the delay in disclosing the fraud. At that meeting, Hilty said residents deserved to know about a case that dated back to the spring and only came to light in late July. Lee maintained the investigation was active, that he had briefed council members privately, and that premature disclosure risked recovery efforts.

City officials later confirmed the loss totaled $277,799.81 in a business email compromise involving a vendor; no city systems were breached. Partial recovery had already occurred through the bank before the insurance payout

Lee closed the discussion by noting the report would now be provided more broadly. No further public questions were raised during the exchange.