The city of Diboll learned it was defrauded nearly $121,000 last week, but officials said the city has been reimbursed and its bank is investigating the situation.

“This is a first for me in the professional world to see this happen,” city manager Jason Arnold said. “But when you take a step back I’m surprised it doesn’t happen more often.”

The account impacted was with Southside Bank; counterfeit checks were cashed out of state by seven different individuals, he said. And while the replicas were not an exact match, they were close enough to those the city uses for the other banks to believe they were legitimate, he said.

Southside let the city know first thing on Thursday morning and worked with the city almost immediately, he said. Bank staff took over the situation, asked the questions they needed to ask and made sure to take care of the city.

“Now we’re just having to deal with the inconvenient things anyone would in this situation,” he said. “We use a checking account for our normal business, just like others do. So shutting down the account and moving things is a big hassle.”

But for as big of a hassle as it has been, Arnold said Southside helped the city a great deal.

The city is covered by fraud insurance and takes additional precautions to prevent a situation like this from upsetting city operations, Arnold said.

Cities have safeguards for their finances, including maintaining multiple accounts with different financial institutions. Arnold said this incident wouldn’t have affected operations.

“We were never in danger of not being able to take care of business,” Arnold said. “It’s a part of the reason why cities keep their money the way we do.”

The city is looking at making a few minor changes and adding some safeguards, but Arnold said he’s confident in the precautions that have been taken.