A Surrey man has been charged in connection with a cyber scam that resulted in a significant financial loss for the City of Hamilton, Ont., after a fraudulent email led to the misappropriation of over $550,000.
The Hamilton Police noted in a press release Thursday (July 10) that, in February 2024, the City of Hamilton experienced a cyber attack that "severely impacted internal systems and limited employee access to routine software and information."
"During the recovery period, manual workarounds were implemented to maintain essential operations, including vendor payments. This created an environment more vulnerable to human error and external manipulation," police said.
A month later, a staffer at a municipal housing affiliate received what they believed to be a legitimate email from a known contractor.
"The email contained altered banking details for a vendor payment. Believing the information to be accurate, the staff member processed an electronic funds transfer for over $550,000—an amount far exceeding the actual invoice—into a bank account at a financial institution in Surrey," the release read.
It was not until later that month that they received an email from the legitimate vendor who reported they had not received the payment. An independent forensic accounting firm conducted an internal review.
The report found that the money had been deposited into an account connected to a numbered company, which was traced back to a 32-year-old Surrey man. The money was then shifted around to multiple newly opened personal and business accounts and various Canadian banks.
"Hamilton Police investigators, with the support of law enforcement partners in Surrey and Edmonton, gathered surveillance video, voice recordings, and banking records to identify the suspect and track the movement of the funds," reads the release.
Due to legal action, one of the man's bank accounts were frozen and $417,000 was recovered, but the City of Hamilton "sustained a financial loss of over $130,000, in addition to forensic and legal expenses."
Police stated that the city intended to pursue restitution.
The suspect turned himself in to Hamilton Police on July 7, and he was released with conditions. He is scheduled to appear in court on Aug. 14.
