Alberta university scammed $11.8 million in fake invoices impersonating Clark Builders for Allard Hall project

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Payments for the contractor completing university's Allard Hall ended up in the scammers' bank accounts instead.

Alberta’s MacEwan University has been scammed out of $11.8 million in a phishing attack, when employees paid invoices purportedly from contractor Clark Builders to criminals who faked online invoices for the soon-to-open Allard Hall project.

The Globe and Mail reports that most of the scammed money from the university in downtown Edmonton has been traced to bank accounts in Montreal and Hong Kong. The accounts have been frozen, representing all but about $500,000 of the total, and the university expects to eventually recover the money after taking legal action.

University spokesman David Beharry said the scammers set a fake website similar to one of the university’s major vendors. “Using that site, the fraudsters impersonated the vendors, asking the university to transfer accounts payable to a new bank account the fraudsters controlled,” The Globe and Mail reported.

Three university employees made payments to the bogus account over a nine-day period ending Aug. 19 of $1.9-million, $22,000, and finally $9.9-million.

The university only realized the error when the real vendor called several days later asking when it would be paid.

Paul Verehsen, president and CEO of Clark Builders, told CBC News that his company has had a long-term relationship with the university, and its invoices had always been paid promptly. The company called the university to inquire when the payments stopped, and that is when the fraud was discovered.

The contractor won’t lose any money because of the fraud but the amount was “significant and meaningful” and had been earmarked to pay sub-trades and suppliers, Verhesen said. “Everybody’s been very understanding and co-operative given the unfortunate situation.”

Beharry declined to identify the vendor involved, but told the CBC that fraudsters produced fake emails for 14 construction firms in the Edmonton area.

“A domain site with the authentic logo was sent,” Beharry told reporters. “The individual asked us to change banking information from the vendor. That information was changed.”

The university says it has improved its financial controls to prevent a recurrence and the university has the funds to pay the real supplier.

The $181-million Allard Hall is home to the visual and performing arts program. Students attended their first classes in the building on Sept. 6. There will be an official opening on Sept. 27.

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