'Very encouraging,' Saskatoon says vast majority of $1M taken by scam has been traced, frozen

Saskatoon's city manager is breathing a sigh of relief.

On Monday, Jeff Jorgenson announced the "vast majority" of more than $1 million stolen from the city by a scamhas been located and frozen in bank accounts across the country.

"This is very encouraging news," said Jorgenson. "Although we are still in the early days and the money has not yet been returned to the city, we will continue to work with the banks and with the Saskatoon Police Service in order to get as much of this money returned to the city as possible."

Last week, Jorgenson announced that $1.04 million had gone missing from city coffers.

A fraudster had impersonated the chief financial officer of a construction firm revealed Monday to be Allan Construction and asked the city to change the company's banking information, resulting in a contract payment going to the scammer.

The company, currently working on a massive refurbishment to the Senator Sid Buckwold Bridge, said the impersonation is troubling.

"It's very disconcerting that the perpetrator used my name and our company name to commit this crime," said CFO Blain Dubreuil in a release. "We have done a security assessment and are confident that our systems were not hacked or compromised."

Jorgenson said the money was traced to between 10 to 15 bank accounts, many of them located in Canada.

A first instalment of around $40,000 has been returned to the city, but it could take longer to get the rest of the money back.

"Now we need to systematically go through each account and work with each account owner to get that money returned," he said.

The City has filed an insurance claim and is waiting for a response. Jorgenson would not divulge how much the deductible might beand said they were still in talks with the insurer to hammer out details on eligibility.

Administration has already begin to tighten financial controls to prevent a similar occurrence from happening in the future. He said it's unusual for companies to change their banking information, but it does happen.

The city said the request to change the banking information was made sometime mid-July. The payment was made around August 7 or 8, but the fraud wasn't discovered until August 12.

It's unclear who was behind the fraud. While the person had to know that the city was working with Allan Construction on a large project, Jorgenson said information on city tenders is available to anyone on the city's website.

"I don't have evidence of who the fraudster is," he said. "I can't say whether it's local or not."

Jorgenson said more information would be likely be made available in the coming weeks.