(GREATER SUDBURY, ON) - In December 2023, the City of Greater Sudbury fell victim to fraudulent activity when a payment intended for a legitimate contractor was made to an unidentified party.
The fraudulent incident pertains to a payment of $1.5 million directed to an imposter posing as the contractor for the Lorraine Street Transitional Housing project.
In a legal action filed on January 15, 2024, the City of Greater Sudbury, as the plaintiff, is pursuing a case against multiple defendants, including John Doe, Jane Doe, 14645065 Canada Inc., and various banks such as Bank of Nova Scotia, Royal Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Montreal, and ABC Bank. The Statement of Claim outlines the following key points:
Claim Details: The City seeks various orders and relief against the defendants, including tracing the proceeds of an electronic funds transfer (EFT) of $1,501,380.66 made by the City on December 21, 2023, to an account at Bank of Nova Scotia. The City alleges fraud, fraudulent misrepresentation, theft, conversion, conspiracy to defraud, and unjust enrichment against the unknown defendants.
Legal Proceedings: The defendants are informed that they must prepare a Statement of Defence within twenty days if served in Ontario, and forty or sixty days if served in other Canadian provinces, territories, or the United States. The City emphasizes that failure to defend may result in judgment given against the defendants.
Recovery Efforts: The City outlines its efforts to recover the funds, which involve collaboration with various banks, insurers, and legal entities. The legal proceeding includes freezing the bank account, disclosing necessary information, and obtaining a court order to return the funds.
Timeline and Legal Basis: The document provides a timeline of events leading to the fraudulent transfer and outlines the legal basis for the claim, including allegations of conspiracy, identity theft, and fraudulent document creation.
This legal action reflects the City's determination to recover the misappropriated funds and holds the defendants accountable for their alleged involvement in the fraudulent activities. The case involves complex legal proceedings, and the City is relying on the legal system to address the issues at hand.
Municipalities, much like individual residents, grapple with the challenges of sophisticated fraud. While we actively strive to prevent such incidents and continually assess and implement measures to counter them, the evolving nature of fraud events poses ongoing challenges.
For more comprehensive information on the incident, please refer to the attached Statement of Claim. This legal document, outlining the details of the event, was filed in Toronto Court on January 15, 2024.
The Greater Sudbury Police Service is currently conducting an investigation, and we are conducting an exhaustive internal review of the situation.
Despite these challenges, the city says timelines for the completion of the Lorraine Street project remain unaffected, and construction work is progressing.