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City of Burlington reports online fraud

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Please see below a media release issued by the City of Burlington.

Burlington, Ont. — June 13, 2019 — On Thursday, May 23, the City of Burlington discovered it was a victim of fraud. A single transaction was made to a falsified bank account as a result of a complex phishing email to City staff requesting to change banking information for an established City vendor. The transaction was in the form of an electronic transfer of funds made to the vendor in the amount of approximately $503,000 and was processed on May 16.

Upon learning of the fraudulent payment, the City took immediate steps. We reported the unauthorized payment to our financial institution; we notified the Halton Regional Police; and we put in place additional internal controls to prevent this from occurring in the future. Criminal investigations are also underway by the appropriate authorities.

A full review of our current processes will determine the need for other changes. The City can confirm that our IT system was not compromised during this incident; no personal information was stolen or shared.

These types of targeted attacks are all too common and can take many forms. Governments and businesses are just as prone to scams as are individuals. In 2018 alone, the Canadian Anti-Fraud Centre (CAFC) received 2,263 reports of business fraud incidents of various kinds, with a total reported loss of $17,501,617.

To maintain the integrity of ongoing investigations, the City will not be commenting further at this time. Additional information will be shared publicly when it becomes available.

“We are taking this matter very seriously. City staff took immediate action including notifying members of Council and our Audit Committee when the incident was first discovered. We are working closely with the police in their ongoing criminal investigation and we have also initiated an independent external investigation of the incident, which will be part of our reporting back to Council and the Audit Committee.” — Tim Commisso, Interim City Manager

MY TAKE:

This was a case of online fraud with falsified documents at a level of sophistication not typically seen and we are taking the necessary steps to prevent it from happening in the future. We are pursuing full recovery of the funds and I have asked City staff to report back to Council as soon as it can on what internal processes have changed and to keep us updated on the recovery of funds and the criminal investigation. This stresses just how important it is that we are all vigilant and recognize the signs of online fraud, phishing and other scams, and report them to the proper authorities — so that no one becomes a victim of this type of criminal activity. 

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14 thoughts on “City of Burlington reports online fraud”

  1. Paul Standring

    the money undoubtedly was transferred offshore and cannot be recovered. I would suggest that the probability that the culprits had assistance from a City employee is statistically significant. I would like to remind the city that we are the taxpayers ( you work for us) and we pay your salaries. We want answers as to what happened here. Updates as to progress and status are expected.

  2. Graham Gilmour

    The culprit who acted should be fired for cause. It’s just too easy for public servants to be careless with taxpayers money because the bureaucracy is a sloppy environment. Just look at The Feds. in Ottawa. They settled with Vice-Admiral Norman using taxpayers’bucks but refuse to divulge how many of our dollars were spent because of top politician-level incompetence. How about $10 million to Khadr?

  3. Beth Hanna-Ross

    Probably why I got a retroactive bill for 3 years of additional property taxes today. They apparently decided my home was worth more all of the sudden with no improvements or changes in the past 3 years. This is unbelievable. New mystery taxes and 500,000 just given away via email is not what I voted for.

  4. Demetrius Koitsopoulos

    $503000 stolen or missing? Someone should really be fired for this. How can someone give bank account info over email? It’s common scense and the hardworking tax payers of this city should not be on the hook for this. Marianne the honeymoon of being mayor is over and its time to pickup the pace and be serious.

  5. Chuck Wightman

    At the provincial level anything over $25000 goes to a minister for approval. The city is making a good argument for amalgamation with frivolous lack of oversight for tax dollars. To break it down, basically two entire residential street just paid a year’s taxes for nothing.

  6. Chuck Wightman

    Someone with clearly not enough sophistication for their job just gave away a brand new city bus. Well Done. Because of course we have money to burn these days, when we can’t even keep up with paving the roads.

  7. My take is that bigger entities have had this happen, the mistake was made, and the city has taken steps to make sure it doesn’t happen again. While it is true that it shouldn’t happen it did. We can’t change that by haranguing city staff, or the Mayor, . Let’s urge them to be vigilant, and hope we never make such a mistake ourselves. As for the statement that even seniors would know better, sadly many seniors would not know better, and this event should serve as a warning to everyone.

  8. This could’ve been avoided with a simple phone call to the vendor what a shame, considering this is a half million dollars.

  9. Are you serious $500,000 was taken on an on-line fraud. Even seniors not computor savy are smart enough not to fall for this. Exactly how is this money going to be replaced. Who signed off on this? someone had. Is this City in the habit of signing off on half million dollar transfers to vendors with no identification? Don’t give me or the taxpayer that bullsh…t line it was sophisticated, your a damn City you would thing you would have firewalls and responsible people in place to avoid this.

  10. I hope all relevant staff will be trained to speak to a known representative of the company before accepting emailed banking account changes.

    For this amount of money acting on just an email is completely inappropriate.

    Someone should be fired.

    1. Hi Ken,
      This is John Bkila, the Mayor’s Media Specialist. In speaking with our Senior Manager of Government Relations and Strategic Communications, yes that is correct – the City of Burlington is out $503,000. As it states in the media release issued by the City, to maintain the integrity of ongoing investigations, the City will not be commenting further at this time. But additional information will be shared publicly when it becomes available.
      Thank you for commenting on the Mayor’s website.

      1. Hard to believe that anyone at City Hall would be authorized to approve a transaction of over $500,000 without some sort of verification. $200 yes, but over $500,000?

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Email:  mayor@burlington.ca

Constituent Assistant: Georgie Gartside
georgie.gartside@burlington.ca
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