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Town of Erie says insurance won't cover the $1 million it lost to scammers posing as construction company

Someone convinced the town to send money electronically to a fraudulent account. The town is still hoping to recoup what was lost.

ERIE, Colo. — The new Erie Parkway Bridge is getting more attention now than it did on ribbon cutting day.

The bridge connecting the east and west sides of Erie has become a reminder of the $1 million mistake the town made in October.

Someone posing as a representative from the construction company that built the Erie Parkway Bridge convinced the town to send $1,016,233.80 to a fraudulent account.

The town had hoped its two insurance carriers, CIRSA and AIG, would cover the loss, but Erie Mayor Jennifer Carroll said Wednesday she was disappointed by what was offered.

“We have a $2 million policy and [AIG is] covering $100,000," Carroll said. "That’s just ridiculous in our minds."

RELATED: Erie sent $1M to scammers posing as construction company behind bridge project

CIRSA cut a check for $150,000 -- enough to cover the deductible for the AIG policy. The town is still out more than $850,000 of money earmarked to be spent on transportation projects.

“That’s going to affect all future transportation projects that we had planned for this year and probably even the next coming year," Carroll said, "so that’s why it’s really important for us as a growing town." 

The mayor said the town had no intent of asking taxpayers to cover the loss. 

"But in the sense that now we can do less with what we have, yes, that’s a negative impact to our taxpayers," she said.

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On Oct. 21 a scammer filled out an electronic form on the town website requesting funds be sent electronically instead of by check to SEMA Construction. The town didn't confirm the request with SEMA before sending the money.

The money was later transferred out of the country, according to town administrator Malcolm Fleming. Investigators determined a Canadian Internet Service Provider was used by the unknown suspect.

A finance division employee with the town of Erie resigned because of the incident.

"We’ve had residents that are, like us, very frustrated with what’s happened, but understand how complex the situation is, and we have some people that are just unhappy with us and think it’s our fault," Carroll said.

9NEWS reached out to AIG Wednesday afternoon about Erie's insurance claim. A spokesman said the company declined to comment.

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