Saskatoon city hall loses over $1 million in phishing scam
Saskatoon city manager Jeff Jorgensen has admitted that the city has lost $1.04 million to a fraudster posing as a construction company’s chief financial officer for weeks. An expert now believes that the money may have been sent overseas and it is possible the city will never see the over $1 million in taxpayer money again.
A news release from the City of Saskatoon reads as follows:
The City of Saskatoon has been affected by a fraud scheme, where a fraudster electronically impersonated the CFO of a construction company and asked for a change of banking information. The City complied, and as a result, the next contract payment intended to go to that company, $1.04 million, was directed to the fraudster’s bank account. The fraud was identified on August 12, 2019.
“My understanding of the Saskatoon case [is] they did not catch this quick enough, and the money, if it’s outside the walls of Canada, it is as good as gone,” said Ryan Vestby, CEO of Edmonton-based CompuVision Systems Inc.
“I would almost call [it] a pandemic – a digital pandemic that’s happening where you’re seeing this more and more,” Vestby said when commenting on the frequency and effectiveness of cyber theft.
He says that cyber theft occurs every day, sometimes hourly, in the private sector, only that we don’t usually hear about it because companies are hesitant to admit such embarrassing losses.
According to Global News, it appears that the fraudster used phishing tactics, a kind of online scam, wherein “imposters target a victim, manipulate the victim into providing sensitive information and then use the information to steal money.”
This particular fraudster did just that and added an extra layer of sophistication by specifically posing as the CFO of a prominent construction company to “advise the city of a change in banking information.,” reports the Saskatoon StarPhoenix. To make matters worse, Jorgenson says that the contract with the actual construction company has not been affected by the fraud, and the money owed to that company will still need to be paid.
Jorgenson says that, due to the public nature of most government spending, the fraudster was easily able to identify ongoing city projects and predict when a major transaction would be made. He, then, used this information to get a jump on the actual construction company and request the payment slightly in advance.
Most of the information on the case is still being kept private as investigations are underway.
“As this is an ongoing investigation, the City cannot disclose further details about the fraud at this time. The City is now notifying the media and the public in an effort to be transparent and also to warn other corporations. The City will continue to work with and fully cooperate with law enforcement”, said Jorgenson in the news release.
Jorgenson says that, first and foremost, retrieving the money, if at all possible, is at the top of his to-do list.
“So right now, the focus is on the recovery of funds,” Jorgenson told reporters in a Thursday news conference. “The banks are working on it. The police are working on it. We have our internal auditor working on it as well. So that’s where our priority is.”
“It’s a million dollars of taxpayer money,” Mayor Charlie Clark told reporters. He added that he is optimistic about their chances of recovering the money as the fraud was identified relatively quickly.
“The world’s changing quickly. The way that identity theft and the way some of these issues are happening can affect anybody. We are going to make sure it never happens again at the city.”
“The research we’ve done has shown that some agencies were able to recover a significant amount of money, some agencies found it virtually impossible to recover the money,” Jorgenson said. “What I would say is that we’re chasing down every lead, cautiously optimistic that we will be able to recover a significant portion of the funds.”
Jorgenson also mentioned possible revisions to their cybersecurity processes, suggesting that the public nature of city hall may make them particularly vulnerable and proper process must be in place.
“Clearly, the control that was used wasn’t strong enough to prevent (the fraud),” Jorgenson said. “What I would say is internal and external staff who are experts in this area are reviewing all financial processes and controls in this area.”
According to police spokesperson Alyson Edwards, as well as Jorgenson, an internal auditor is now investigating the theft, as are Saskatoon police.
“This incident is a serious criminal matter, and the City is working hard to recover these funds, minimize the opportunities for this to occur in the future, and to cooperate with the police in this investigation,” says Mayor Charlie Clark.
Food and tools were among the items stolen from a foodbank in Windsor over the weekend, causing the organization to close on Monday.
Footage of the incident was posted by the Windsor Family Homes and Community Partnership.
“They cleared out a ton of food,” they said in the Facebook post.
According to footage from the security camera, the break-in took place around Saturday, early in the morning. CTV News reported that the building is located at 900 Howard Ave.
An investigation is underway by the Windsor police.
The organization says that they have made the video footage public “in hopes that someone can help us identify the people who would rob a charitable organization.”
A Saskatchewan judge has charged a man with fraud under $5000 as well as property obtained by crime. Andrij Olesiuk has been found guilty after he defrauded thousands of dollars from donors who thought the money was going to the victims’ families of the Humboldt Broncos bus crash of April 6, 2018.
Olesiuk set up a GoFundMe page entitled #PrayForHumboldt that was said to be crowdfunding for the victim’s families and raised approximately $3800. A separate GoFundMe page for the same purpose raised $15.1 million dollars according to Global News.
Olesiuk took just over $3700 from the GoFundMe account and transferred it into his personal account.
Andrij, also known as Jay Max Olesiuk represented himself during the trial and stated that he had no “ill intention” with the funds raised through his crowdfunding page.
He said he didn’t believe Olesiuk’s story about the woman at his door, saying no sensible person would’ve turned over thousands of dollars. He kept the Broncos money for his own use. Olesiuk stated in his testimony that a woman came to his Martensville, Sask. doorstep on April 24 to solicit donations for a Broncos charitable event. Olesiuk claims to have given the woman $4100 that day in cash, rather than donate his fund directly to the Broncos. The accused was unable to recall the woman’s name or organization she was purportedly with.
“It is too incredible a story to believe,” said Judge Brent Klaus.
Darren Howarth, crown prosecutor argued the “mysterious woman” didn’t exist and believed Olesiuk’s defence to be “ridiculous.”
Howarth presented a transaction log that showed Olesiuk approved a $3,300 payment from GoFundMe to his account one day before the woman allegedly appeared. Olesiuk received the payment on April 25, 2018.
“What are the odds…. that this lady just happened to show up in between the dates he initiated the withdrawal and received the money?” Howarth asked.
Olesiuk defended his story claiming to have been given a receipt from the woman days later in his mailbox. However, he was unable to provide the receipt or even a copy of one as evidence during the trial. Olesiuk said he lost the receipt in a February 2019 house fire.
The defence instead presented a thank you note as an exhibit, which Olesiuk testified he received from the anonymous woman immediately after his donation. He admitted that he hadn’t previously mentioned the note to the police or crown before during cross-examination.
Olesiuk assured the court that the note was in his garage, but the RCMP carried out a search of Olesiuk’s property on November 20, 2018 and said officers never found no such note.
Olesiuk is scheduled to be sentenced on March 3.
Former Saskatchewan MP and Liberal cabinet minister Ralph Goodale said the nascent Wexit separation movement threatens Conservative parties in the province and “would be devastating” economically.
“Because where will those votes come from in the first place, those votes that would support the Wexit movement if it became a party? Those votes would come primarily from the Conservatives and the Sask Party,” Goodale told CBC Saskatchewan.
“So it is in the interests of the Conservatives and the Sask Party to ensure that the Wexit movement does not become a political party that would take votes from them.”
Goodale had served as Regina-Wascana’s MP since 1993 but lost his seat to Conservative Michael Kram in last year’s 43rd general election, leaving the province without a single seat in the House of Commons.
The former Finance minister (PM Paul Martin) and Public Safety Minister in Prime Minister Justin Trudeau’s previous majority government also said separation would have immediate economic consequences for Saskatchewan.
“When you actually go to the dollars and cents and the nuts and bolts of it all, it would be devastating,” he said.
“We would lose right off the top, for example, $1.7 billion in transfer payments that come into Saskatchewan because of the government of Canada. We would lose things like the RCMP Training Depot at Regina. That would be gone. That’s $40 million every year into the economy.”
Goodale went on to suggest that the Wexit debate itself was “counterproductive.”
“It leads people to have great and furious arguments. It leads to divisions being created and it takes people down a counterproductive rabbit hole,” he said.
Provinces are disagreeing with the federal Liberals regarding their plan to enforce a handgun ban. They are instead siding with law enforcement who are arguing that banning legal guns is not the way to reduce violent crimes in Canada.
Saskatchewan is among the governments arguing against the planned handgun ban which is only directed at legal gun owners. They are also against banning semi-automatic rifles and allowing municipalities to choose whether they want to ban handguns for their areas on their own judgement.
Ontario’s Premier, Doug Ford, also commented that bans on legal gun carriers will not be an effective way of lowering gun violence in his area or others.
In Alberta’s legislature, they unanimously passed a motion to preserve the rights of their legal gun owners.
Gun bans are opposed by the Canadian Association of Chiefs of Police. CTV News reported Vancouver police Chief, Adam Palmer saying, “The firearms laws in Canada are actually very good right now. They’re very strict.”
Trudeau previously said, “I very much look forward to the election campaign in which we will be able to share with Canadians our vision for how to keep Canadians safer.”
“That involves, yes, strengthening gun control but it also involves investments that … are so deeply needed in community infrastructure.”
Palmer argued, “People can’t be naive to the realities of how it works with organized crime and smuggling.”
“There will always be an influx of guns from the United States into Canada,” he added. “Heroin is illegal in Canada, too, but we have heroin in Canada.”