Hampton VA data breach cover-up?

I first reported on a data breach in Hampton, VA here. Now police and local officials are saying they believe that the only people who actually saw any sensitive data were the people who reported it. It takes real nerve to make such a wildly improbable claim—and with apparently no evidence to back it up. This smells like a cover-up or just cluelessness. Does anyone in Hampton, VA even care? Do any security experts that read this blog care to comment?

The TimesDispatch.com has the story.