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The city of Portland has temporarily lost $6.7 million earmarked for the Bull Run water filtration project due to 鈥渇raudulent activity,鈥� a city spokeswoman stated Wednesday.

The matter is under investigation by local and federal law enforcement, according to the city.

The funds have been recovered and are in the custody of the U.S. Marshals Service, the city stated.

鈥淭he city is taking this matter seriously and is making every effort to ensure the return of public funds and that those responsible are held accountable,鈥� city spokeswoman Carrie Belding stated Wednesday.

According to a lawsuit filed by the city in New York, a fraudster posing as 鈥淛ohn Lisman鈥� was able to persuade city officials into changing the bank account information on file for a Bull Run vendor. Lisman posed as a representative of MWH-Kiewit, the joint venture that is leading construction of the project, according to the complaint. The fraudster then directed the city to send the $6.7 million payment to an attorney trust account at JPMorgan Chase Bank N.A.

The city, with the assistance of the FBI and banks, traced the money to an account owned by Raiti PLLC, a Manhattan law firm. The firm has cooperated with Portland officials and others to facilitate securing the funds, according to the city鈥檚 news release.

Now that the funds have been secured, the city intends to discontinue the lawsuit, Belding stated.

The city has withheld some details of the incident while the investigation proceeds.

鈥淲hile we must limit what can be shared during the ongoing investigation, we are committed to transparency and will provide updates as appropriate,鈥� Belding stated.

MWH Constructors has an employee named John Lisman, whose identity was assumed by the fraudster, according to the complaint.

The apparent fraud is the latest complication for the city鈥檚 $2.1 billion project to build a water filtration plant and pipeline network in southeast Multnomah County. In February, the Portland Water Bureau ordered the joint venture building the project to stop work after the Oregon Land Use Board of Appeals issued an adverse ruling.

A hearing on the matter was held last week, and a decision is expected in June.