Sudbury has recovered some of the $1.5M lost to fraud

Approximately $1.05 million of the $1.5-million the City of Greater Sudbury was reportedly defrauded of has been recovered throughout the courts to date. The municipality said the amount recovered was $1,044,259..

An update on the case was provided in a virtual courtroom in Sudbury, at which lawyer Catherine Francis, representing the City of Greater Sudbury, outlined the latest information.

The case involves an alleged fraudster who posed as a contractor for the Lorraine Street transitional housing complex via emailed correspondence. They allegedly hacked the contractor’s email account, which was used to correspond with the city.

After some back-and-forth, which included a legitimate email chain from the contractor and the alleged fraudster intercepting follow-up emails from the city, the fraudster was reported by the court to have opened a Bank of Nova Scotia account.

In a statement of claim filed by the city in a Toronto court on Jan. 15, it’s noted the city issued an electronic funds transfer of $1,501,380.66 into the fraudster’s account on Dec. 21, 2023.

Earlier this month, the court authorized the disclosure of information from various banks, which the Royal Bank of Canada (the city’s bank) responded to immediately, Francis reported this morning.

“They provided a spreadsheet with respect to the disbursement of the funds,” she said, reporting that while a lot of the money remained in the Bank of Nova Scotia Account, various amounts were also dispersed to a dozen other bank accounts.

“We got a call last night from Bank of Nova Scotia’s internal investigator that they will be sending us a ... wire probably today in the amount of $1,031,772.85,” Francis reported, adding that approximately $20,000 in additional funds from a Tangerine (Bank of Nova Scotia affiliate) account would also be wired separately.

These funds, she said, are “in addition to small amounts that were returned by Royal Bank of Canada for two accounts held at Royal Bank.”

This court appearance saw Justice Barbara Conway authorize additional disclosure of information to banks in an effort to recover more money.

Approximately $440,000 “appear not to be recoverable or at least not in those accounts,” Francis said during today’s court appearance.

In one case, she pointed to a numbered company whose funds have been frozen despite the company’s claim the money in question was an installment for window blinds from another company Francis said does not appear to be “a valid entity.”

Through this and other tracked funds, she said, “It’s possible we may be able to get more.”

This case’s next court appearance, with updates on the latest round of disclosures, will take place at 10 a.m. on March 6.

Tyler Clarke covers city hall and political affairs for Sudbury.com.