The Alameda County Transportation Commission is suing its insurer after an email scam sent $500,000 in public funds to someone posing as a contractor, a loss that investigators say could not be recovered. In September 2024, commission staff received an email that appeared to come from the head of a Folsom-based company hired for a tree-planting project. The sender asked the agency to pay into a bank account different from the one it had on file. Staff were unable to verify the new account information, but the commission issued a $500,000 check, which went to a scammer in Illinois. About four weeks later, staff authorized another check, this one for $2.5 million, to the same imposter. The payment was directed to a North Carolina address, but United Bank, where the recipient held an account, flagged the transaction as suspicious and froze the funds. The first check had already been cashed and converted into cryptocurrency. An investigation involving the FBI’s Internet Crime Complaint Center and the U.S. Secret Service was unable to recover it. The commission is seeking reimbursement from its insurer in federal court. The complaint was first filed in Alameda County Superior Court in August, and the insurer has declined to cover the loss. The available details do not specify the insurer’s name or its stated grounds for denying coverage. The case raises questions about safeguards for public payments: staff proceeded with the $500,000 transfer even though they could not confirm the changed banking information. The commission has not been identified as having recovered that money, leaving the loss to the agency—and potentially local taxpayers—unresolved.