(Texas Scorecard) – A Fort Bend County municipal utility district west of Houston is investigating over $8.2 million in unauthorized transfers from its investment account.
The funds from MUD 35 were reportedly moved without board authorization on April 7, prompting immediate notification to law enforcement and district officials.
According to a statement by the district, the administrator of the funds discovered the irregularities on April 8 and immediately notified the FBI, the district’s leadership, and its bookkeeping firm.
$3.4 million of the fraudulently transferred funds have been recovered.
The district, which provides water, sewage, and drainage services to over 2,000 homes and businesses, has said that it remains solvent, and utility operations would not be impacted.
MUD 35’s bookkeeping firm maintains two main financial accounts for the district: a banking account for its operating expenses and an investment account that earns interest.
Only the investment account was compromised.
The district’s leadership has stated it is working with forensic accountants, law enforcement, and outside legal counsel to trace and recover the missing funds.
At this stage, the investigation is ongoing, and no suspects have been named publicly.
Municipal utility districts are public entities responsible for financing and managing infrastructure like water, sewage, and drainage systems using substantial funds raised through property taxes.
The unauthorized transfers in MUD 35 highlight the need for robust internal controls and transparent financial practices to protect taxpayer resources. MUD 35 is one of over 900 MUDs operating in Texas.
The process of recovering the remaining funds is ongoing, and officials have encouraged anyone with relevant information about the fraudulent transfers to contact district authorities at 713-623-4531.
An attorney for MUD 35 told Texas Scorecard they could not comment on an ongoing investigation.