The nearly $12 million that MacEwan University lost in an online "phishing" scam was owed to Edmonton-based Clark Builders for work on the new Allard Hall, set to open later this month.
Clark Builders, the contractor for the project, won't lose any money because of the fraud but the amount was "significant and meaningful" and had been earmarked to pay sub-trades and suppliers, Paul Verhesen, president and CEO of Clark Builders, told CBC News Friday.
"Everybody's been very understanding and co-operative given the unfortunate situation," Verhesen said.
The scam was uncovered when Clark Builders failed to receive three payments from MacEwan, including one for more than $9 million that was "the holdback that was due to us for the final billing on that project," he said.
'We've been working with MacEwan since 2003 on a number of different projects," Verhesen said.
"They're one of our best clients in terms of payments and just the overall relationship, so we found it quite odd that we weren't receiving payment for the invoices.
"And it's that relationship that triggered us to give them a call and ask why we weren't getting paid. That's when the whole … situation was brought to light."
MacEwan disclosed Thursday it fell victim to an $11.8 million "phishing attack" after staff failed to call one vendor to verify if emails requesting a change in banking information were legitimate.
Three payments were made to the fraudulent account in August, including one for $9.9 million, MacEwan spokesperson David Beharry told reporters.
Most of the money — more than $11.4 million — has been traced to accounts in Montreal and Hong Kong. Those funds have now been frozen, and MacEwan is working to recover the money. The status of the rest of the missing money isn't known.
Relationship 'as good as ever'
"Obviously [we are] not pleased with somebody impersonating, or taking our information and using it in a fraudulent manner," Verhesen said. "I'm absolutely not pleased about that at all."
But despite the fraud, the relationship between Clark Builders and MacEwan University remains "as good as ever," he said.
"Relationships get tested not in good times but in challenging times, and they've been very forthcoming — very collaborative in terms of keeping us informed of what's going on and when it's happening, and obviously we've been doing the same thing.
"So this is a very, very unfortunate situation. But as a result of that they've been nothing but professional about this."
Policies 'there for a reason'
Verhesen said he was surprised that anyone would be capable of committing that type of fraud and that so much money was involved.
"I think the lesson learned here for all of us, both personal and business-wise, including Clark Builders, is that the policies and procedures that we have in place for doing commerce are there for a reason," he said.
"And if nothing else, we need to know that there are folks out there that are trying to defraud good citizens doing their job."
The $181-million Allard Hall, known during its three-year construction as the Centre for Arts and Culture, is a new signature building that's part of MacEwan's City Centre Campus.
The five-storey building is home to the visual and performing arts program. Students will attend their first classes in the building on Wednesday. An official opening is set for Sept. 27.