A "sophisticated computer based fraud" siphoned away some $700,000 the City of Prince George had intended to pay a contractor, Prince George RCMP said.
RCMP said the city advised police in early September that two payments had been fraudulently redirected and were never received.
With the help of financial institutions, investigators recovered most of of one payment, however approximately $375,000 remains lost, RCMP said and added officers are working to track down the culprits.
"Our first concern was to determine the extent of the fraud and who was affected," Cpl. Craig Douglass said. "There are no indications that the City of Prince George was hacked or that personal information was compromised."
City finance director Kris Dalio said the scam was a form of "social engineering fraud" that began when the contractor was tricked into sharing confidential information that was then used to intercept the payments.
He said the first payment was sent out in late August and the second in early September and one of them was recovered in time.
"The funds from the first payment had been depleted before it was discovered," Dalio said.
Dalio said he understands the delay in making the incident public was related to the confidentiality of the investigations the police and the banks have had to carry out.
"Just like with a lot of crimes, there is an advantage to not having full disclosure right at the outset... that's my understanding," he said.
Prince George RCMP Cpl. Craig Douglass said "frauds take a lot of time to investigate and we needed to be confident of what we had before going public."
As to who will be left on the hook for the $375,000 outstanding, Dalio said insurance claims are in process.
"Part of that process will be going back and forth with the contractor," he said.
RCMP also provided the following tips to keep other businesses and agencies from being victims:
- Be on the lookout for invoices that use the name of legitimate companies. Scammers will use real company names to make the invoices seem authentic. Make sure you inspect invoices thoroughly before you make a payment;
- Be extra cautious of vendors that suddenly change the method that 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.
For more information or to report a fraud, contact the Canadian Anti-Fraud Centre at 1-888-495-8501 or www.antifraudcentre.ca.
Mark Nielsen, Local Journalism Initiative Reporter, Prince George Citizen