British Columbia

City of Prince George loses $375K to fraudsters after electronic payments were diverted: RCMP

RCMP say fraudsters stole $700,000 from the City of Prince George and less than half the funds have been recovered. According to police, the city had directed two electronic payments to a contractor but the money never arrived.

$700K for contractors initially stolen by 'sophisticated computer-based fraud,' police say

The city reported the scam to RCMP and investigators were able to work with financial institutions to recover some of the $700,000, but $375,000 is still missing. (Andrew Kurjata/CBC)

RCMP say fraudsters stole $700,000 from the City of Prince George and less than half the funds have been recovered.

According to police, the city had directed two electronic payments to a contractor but the money never arrived.

The city reported the scam to RCMP and investigators were able to work with financial institutions to recover some money, but $375,000 is still missing.

The fraud was reported in September.

Police say there is no indication the city was hacked or personal information compromised, and the crime appears to be the result of a "sophisticated computer-based fraud."

Cpl. Craig Douglass says investigators are working with international partners to try to determine who is responsible, and that police are aware of similar crimes across Canada.

Prince George mayor warns other cities

Prince George Mayor Lyn Hall says city staff were the first to notice irregularities in the account, and warned the contractor of concerns.

"The system is strong and really what it was, ultimately, a hack against the contractors," said Hall. "(But) we were still party to this. It's difficult to take, quite frankly. We work hard to make sure the systems are tight, and as a result of this, there is a review of the systems in place and how to strengthen them."

So called "man-in-the-middle" phishing scams have targeted private companies and other agencies, including the N.W.T. government.

"One of the things we wanted to let municipalities and regional districts know is, look: it happened to us, it could happen to you, and here's the heads up. This is how we were attacked and we want to make sure you have processes in place that will protect you."

RCMP highlight warning signs

RCMP Investigators want to remind other governments, businesses & individuals to be mindful of computer-based frauds.

Police shared a list of tips for people and businesses to avoid computer-based financial fraud:

  • Make sure you inspect invoices thoroughly before you make a payment.
  • Be extra cautious of vendors who suddenly change the way they accept payments.
  • Compile a list of companies your business uses to help employees know which contacts are real and which are not.
  • Always verify that the organization you are dealing with is legitimate before you take any other action.
  • Carefully verify email addresses and web domain names for any online payments.

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