Most of $1M lost in fraud ‘locked down’
City of Saskatoon hires lawyers to recover money scattered among multiple accounts
SASKATOON City of Saskatoon staff say $40,000 of the $1.04 million lost through an online fraud scheme has been recovered, while the majority of the funds have been legally “locked down.”
City manager Jeff Jorgenson provided additional details about the fraud and recovery efforts in an interview on Monday. He did not specify how much of the remaining $1 million scattered among “multiple” bank accounts is under lockdown, or the country of origin of the accounts, but said the focus right now is on efforts to recover the money. The city hired an Ontario-based law firm to work with Canadian banks and issue court orders where most of the big banks are based.
“What I can say is the vast majority of the money has been traced and legally frozen,” Jorgenson said. He was advised not to disclose how much of it was traced by both the internal and Ontario legal teams, in part because the amount is changing “hour by hour” as the banks find more money, he said.
The money that has been located so far is in 10 to 15 accounts, Jorgenson said. After the money is frozen through the court orders, the individual bank account holders have to be informed they have the proceeds of fraud and to return the money. Jorgenson said some of the money will be returned voluntarily.
“There’s a chance that some might contest it, and we basically just go through the legal proceedings to do everything we can to get the money back,” he said.
He thinks there’s a possibility some of the money has been spent, since not all of it has been frozen, he added.
The fraud was the first of its kind the City of Saskatoon has faced. Jorgenson said the fraud came to light on Aug. 12 after it became clear to the rightful receiver, Allan Construction, that the funds weren’t going to show up in its bank account. The payment was specifically related to the Sen. Sid Buckwold Bridge rehabilitation project, he said.