Dec. 13, 2023 — City of Burlington
Further to yesterday’s update at City Council, the city is sharing an update on the 2019 online fraud incident. To date, the city has successfully recovered 84 per cent of the funds, representing a total of $422,641.67.
Efforts to recover these funds include the city making a claim to its insurer pursuant to its Cyber Crime Policy, the commencement of a Superior Court of Justice action and the negotiated restitution in the criminal proceedings. To date, the city has recovered a total of $422,641.67 of the $503,026.66 fraudulent vendor payment made. This represents an additional $100,000 since $322,641.67 was recovered in 2020.
Given the complexity of this matter, 84 per cent recovery of fraudulent funds is a relatively high rate of recovery and a successful resolution for the city. The city’s position is that the maximum amount of recovery has been achieved with all options for recovery explored and exhausted.
A report outlining the methods of recovery is available on the city’s website: Report L-58-23: Fraudulent vendor payment update
Being able to recover a significant portion of the remaining outstanding funds is good news for our community in this case. On behalf of Council, I hope this will bring an additional sense of relief to the Burlington community. I want to thank the quick action of city staff and Halton police in their efforts in recovering as much of these funds as possible. City staff have also secured our internal controls and processes to substantially strengthen our prevention efforts for the future, particularly as cyber-attacks become more common.
Mayor Marianne Meed Ward
Background
In May 2019, the city discovered it was a victim of a fraud where a single transaction in the amount of $503,026.66 was made to a falsified bank account in response to a complex phishing email requesting to change banking information for an established city vendor.
Upon learning of the fraudulent payment, the city took immediate steps. The unauthorized payment was reported to the city’s financial institution and the Halton Regional Police, and the city put additional internal controls in place to prevent this type of fraud from occurring in the future.
Since 2019, the city’s legal staff took various measures to recover the funds and staff provided regular updates to council and members of the public to keep them informed of the city’s ongoing efforts.
The dedicated efforts of our legal team, in close collaboration with city staff and Halton police, have been instrumental in achieving this cost recovery milestone, and I express my sincere appreciation for their work. This incident is a good reminder of the importance of continuous improvement efforts, particularly when it comes to cyber security.
Tim Commisso, city manager
