City of Saskatoon awaiting court ruling on fraudulently obtained money

The City of Saskatoon is waiting for an Ontario court ruling on whether a sum of money that was fraudulently obtained from the city will be returned.

According to city officials, roughly $700,000 of the $1.04 million directed to a fraudster’s bank account in August has been recovered to date through court proceedings.

City manager Jeff Jorgenson said a hearing was held in Toronto on Nov. 5 about the funds, which are currently frozen in bank accounts due to a previous court ruling.

“This matter has been heard by the court, and no further actions can be taken on recovery efforts until we know its decision,” Jorgenson said in a statement on Thursday.

“We can’t speculate on how long it will take or what the decision will be.”

City officials previously said an individual electronically impersonated the CFO of Allan Construction and asked for a change in banking information.

Allan Construction is the contractor for the ongoing rehabilitation of Sid Buckwold Bridge. Phase 1 of the project was completed at the end of October.

The city says it complied, resulting in the company’s next contract payment of $1.04 million being deposited into the fraudster’s bank account.

The city said the company is not implicated in the fraud, noting this was a case of identity theft.

“The city did have controls in place. It’s not a case where this was an uncontrolled situation,” Jorgenson said on Aug. 15.

“This was a case where there was an identity theft … and our controls missed that — the impostor.”

Allan Construction CFO Blaine Dubreuil previously said a security assessment was carried out and that there were no signs the company’s systems had been hacked or compromised.

“It’s very disconcerting that the perpetrator used my name and our company name to commit this crime,” Dubreuil said in August.

“We’ll be working closely with the City of Saskatoon and the Saskatoon Police Service as the investigation continues.”

The fraud was uncovered on Aug. 12, and an Ontario judge froze money in a number of bank accounts on Aug. 16.

“We’re extremely grateful for the efforts made by many people and organizations to recover the stolen money,” Jorgenson said.

“We remain optimistic that the remaining funds that are still frozen in several bank accounts will be returned to the city.”

Jorgenson said city council will receive an updated report into the root cause of the incident before the end of the year.

Both the city and Allan Construction have said they will not disclose any further information to protect the integrity of the investigation.

Police have not commented on the investigation but issued an advisory in August warning companies that scammers were targeting human resources and finance departments by email.

Investigators said the scam tricks employees into changing banking information so cheques are deposited instead into accounts controlled by fraudsters.

1:08 Saskatoon police continue investigation into city fraud case