Edmonton Economic Development defrauded of $375,000 in 'phishing attack'

Edmonton Economic Development Corp. says it has fallen victim to a fraudulent financial transaction in the amount of $375,000.

'We understand the nature of the attack; we don't know where the bad actor is [or] who the bad actor is'

The Edmonton Economic Development Corp. says it has fallen victim to a $375,000 fraud. (EEDC)

Edmonton Economic Development Corp. said Wednesday it has lost $375,000 in a "fraudulent financial transaction."

"We are working with authorities and legal counsel to determine if the funds can be recovered," the EEDC said in a news release.

The Edmonton Police Service is investigating the alleged fraud, a spokesperson said. "No further details are available at this time as the investigation is in its preliminary stages," Cheryl Voordenhout said in an emailed statement.

The EEDC, a City of Edmonton agency, is funded by the city to drive specific economic activities. 

The organization was told by its financial institution in late December there were irregularities in a transaction, said Terry Curtis, EEDC's vice-president of corporate relations.

The organization informed the City of Edmonton this week and disclosed it to the public Wednesday, he added.

Investigation ongoing

"Now that we have concrete information to report that we were the target of a phishing scheme, we have confirmed that, and there's an investigation that's ongoing on this matter ... where the funds were directed; how the funds were directed, what the transaction looked like.

"We understand the nature of the attack; we don't know where the bad actor is, who the bad actor is, how it transpired," Curtis said.

He said someone involved with EEDC was impersonated, but he wouldn't disclose whether the person was an employee of the organization.

"We know it was a phishing attack, but by whom we don't know," Curtis said.  

'Very concerning'

Coun. Sarah Hamilton is calling for an emergency shareholders' meeting to discuss the situation. 
 
"It is alarming," she said Wednesday after the EEDC sent out a press release.
 
She questions why it took so long for the organization to communicate the fraudulent transaction to the city. 
 
"I personally am a little skeptical that it took a full month to figure those things out," she told CBC News. "If they knew about this in December, how long did it take to get EPS involved?"
 
She said it's important for city councillors to understand EEDC's action on the fraudulent activity, so they know it's not going to happen again. 
 
"When was the board notified and when were directors notified and what steps were taken at each stage to ensure the security of the organization?"
 
Mayor Don Iveson called the situation "very concerning."
 
"Those are public dollars in the hands of EEDC to achieve economic goals," he said.  
 
Iveson said council will expect a full report as the organization's sole shareholder. 
 
"EEDC is not unique, but clearly this will need to be investigated." 

On Thursday, city council's audit committee is expected to discuss a future audit of EEDC, scheduled to start in 2020. Iveson said he supports the auditor doing the evaluation sooner.

Curtis said he won't elaborate further on the nature of the financial transaction while the matter is under investigation.

The organization has hired Deloitte to assist with the investigation, Curtis said.

Consulting firm Deloitte and accounting firm Grant Thornton will delve into EEDC's processes and systems to help prevent future phishing attempts and conduct an audit, he said.

In 2017, MacEwan University was defrauded of $11.8 million in a phishing scam.