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Fraudulent construction payment fully recovered by Saskatoon

JOC News Service
Fraudulent construction payment fully recovered by Saskatoon

SASKATOON, SASK. – Thanks to a court ruling, the city of Saskatoon will recover all funds lost in a construction scam.

The city announced that an Ontario Superior Court Justice has ordered the return of $335,000 in city funds obtained by impersonating a construction official.  The court order is the final step to recover all $1.04 million that was directed to a fraudster’s bank account in August.

“This is exactly the outcome we have wanted for the past three months,” said City Manager Jeff Jorgenson in a press release. “We are grateful to the Court and for the efforts made by many people and organizations to recover this stolen money.”

Justice Michael A. Penny reserved his decision on November 5. The remaining funds had been the subject of court hearings in Toronto, where three parties claimed they had been unwitting victims of the fraud scheme.

According to court records, Justice Penny found none of the remaining defendants provided enough evidence to require a trial. He also awarded the City $25,000 in court costs. Each defendant has 30 days to appeal.  Until then the money will be held in trust.

Jorgenson added that city officials are finalizing the costs of the recovery and has already installed tighter accounting measures at City Hall.

“The finance team has worked closely with our internal auditors to implement appropriate controls that are now in place to help ensure that nothing like this happens again,” Jorgenson said.

Jorgenson anticipates an update report on the full cost of the recovery and findings of the root cause investigation will be provided to City Council before year-end.

The money was put into a fraudster’s account after they impersonated the chief financial officer for Allan Construction. They requested a change of banking information and after the city complied, the next contract payment intended for Allan instead deposited into the fraudulent bank account. The city discovered the scheme on August 12.

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