Saskatoon files insurance claim after $1.04M lost to fraudster

Excerpreted article was written By Laura Woodward, CTV News

The City of Saskatoon has filed a claim to its insurer in an effort to retrieve the $1.04 million it lost in a fraud scheme, a city spokesperson says.

Police investigators and banking institutions are also working with the city to try and recover the cash.

“The fraudsters are becoming more and more sophisticated all the time,” said Alyson Edwards, a Saskatoon police spokesperson.

Edwards was unable to go into detail about the investigation in finding the city fraudsters, but said officers are working with other victims of scams to draw parallels.

“You want to look at whatever evidence we have, compare it to whatever other cities have experienced and see if there are any similarities.”

The Saskatoon scam is one of the largest municipal scams in Canada,

Recovery ‘not impossible’

At least one IT expert has hope the cash will be recouped.

Jon Coller, the University of Saskatchewan’s chief information security officer, told CTV News it’s not impossible to recover the cash – as long as the money is still in a bank.

“Provided people act fast enough and the money hasn’t moved too far, it is definitely possible to recover,” Coller said.

In August 2017, Edmonton-based MacEwan University lost $11.8 million in an email scam. Officials transferred the funds into an account believed to be a university vender. In April 2018, the university announced it had recovered $10.92 million.

However, city manager Jeff Jorgenson told reporters Thursday that recouping the money would be a challenge.

“There is no guarantee that any of the funds can be recovered or will be recovered.

“What I can say is we’re doing everything we can do recover as much funding as we possibly can.”

Mayor Charlie Clark said he believes there is a chance the funds will be recovered, but for now he hopes the incident can serve as a cautionary example.

Social insurance numbers are stolen by the millions

New SINs ‘will not protect individuals from fraud,’ said government official

Jonathon Gatehouse · CBC News

The one million Canadians who saw their social insurance numbers stolen in the massive Capital One data hack shouldn’t count on Ottawa to help bail them out of trouble with identity thieves.

In 2018, the federal government issued replacement SINs in just 60 cases of fraud and abuse, according to recent testimony before a House of Commons committee.

Elise Boisjoly, an assistant deputy minister with Employment and Social Development Canada, told the Commons standing committee on public safety and national security that her department handed out more than 1.6 million new social insurance numbers last year — but issued only a few dozen replacement numbers because “getting a new social insurance number will not protect individuals from fraud.”

“The former social insurance number continues to exist and is linked to the individual. If a fraudster uses someone else’s former social insurance number and their identity is not fully verified, credit lenders may still ask the victim of fraud to pay the debts,” Boisjoly said during a mid-July hearing on a data breach at the Quebec-based credit union Desjardins, which exposed the personal data of 2.7 million customers, including SINs.

Social insurance numbers are prized by criminals because they can be used to apply for credit under someone else’s name or establish new “synthesized” identities. They also can be sold to create false documentation for illegal workers.

While Boisjoly acknowledged the challenge posed by “ever larger data breaches,” she said issuing replacement numbers to victims might create more problems than it solves, leading to potential errors in the calculation of pensions and benefits and requiring recipients to monitor both the old and new SINs on a “regular and ongoing basis.”

Earlier this week, U.S.-based Capital One Financial Corp. disclosed that a March breach of its cloud storage server exposed the sensitive information of 100 million Americans and six million Canadians — including names, addresses, credit scores and, in some cases, social insurance numbers.

The information was taken from card holder accounts and credit applications dating back as far as 2005. A 33-year-old Seattle software engineer has been charged with computer fraud and abuse after she allegedly boasted of the heist on social media, indicating that she wanted to share the SINs, full names and dates of birth.

It’s just the latest example of a large-scale hack targeting the personal information of consumers.

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Bags of cash, luxury car export scheme described in B.C. money laundering

VICTORIA _ An independent report suggests organized criminals are laundering money through British Columbia’s luxury car sector and some are even receiving tax rebates from the province for the transactions.

The B.C. government tasked former RCMP deputy commissioner Peter German in September to identify potential links between criminal enterprises and real estate, horse racing and luxury vehicle industries.

Attorney General David Eby called the findings released Tuesday “disturbing confirmation” that money laundering is a problem in B.C. that goes beyond the previously identified channel of casinos.

“In the luxury car market, there is no financial reporting of large cash purchases, no oversight of international bank wire transfers and no apparent investigation or enforcement,” he said.

“It’s a recipe for exactly what’s happened here: Vancouver becoming North America’s luxury car capital generally, and perhaps since 2013, claiming North America’s luxury car export capital title as well.”

In addition to gathering accounts of luxury car sales of up to $240,000 paid for with bags of cash, German uncovered a “huge” and complicated luxury-vehicle export scheme involving hundreds of so-called “straw buyers” in the grey market.

Many of the straw buyers appear to be foreign students hired to purchase a car in Canada that will almost immediately be exported and re-sold in China, where dealerships charge more due to the tax structure and soaring demand. The role of a straw buyer is to insulate the true purchasers from contact with the seller, the report says.

The purchasers pay provincial sales tax when they buy the car but apply for a refund when it’s exported and the practice has grown exponentially, costing the province almost $85 million since 2013, Eby said.

Before 2014, fewer than 100 vehicles a year received the refund. In 2016, the provincial sales tax was rebated on 3,674 vehicles and the surge in applications required the Finance Ministry to hire more staff, the report says.

The source and destination of the tax refunds and any income tax reporting from these individuals or entities is unknown, but the conditions are ideal for money laundering, the report says.

It’s an unregulated grey market, with little know about the people or companies involved and where the money comes from, the report says.

“It provides a wonderful opportunity for large-scale money laundering, with very little chance of detection.”

It’s impossible to put a dollar figure on the amount being laundered through the luxury car sector, German said.

Eby said he was shocked to hear about the refunds and the government is moving quickly to address the issue.

“We have not waited to take action on this report.”

The Finance Ministry is reviewing the tax rebate program and details of allegations made in the report have been forwarded to police, the Insurance Corporation of B.C., and the Vehicle Sales Authority. The province is also preparing plans for regulation of the luxury car sector.

The apparent growth in luxury car money laundering has coincided with other potential criminal activity and problems in the market, Eby said.

“I note the remarkable correlation between the timing of the exponential expansion of this grey market export scheme, the exponential growth of suspicious cash transactions at B.C. casinos and the exponential real estate price ramp up on the Lower Mainland,” he said.

The report also found vulnerabilities in the horse racing sector with a lack of financial reporting requirements but no excessive issues related to money laundering.

The report is one of two commissioned by the province in September amid what the government said was “widespread concern about B.C.’s reputation as a haven for money laundering.”

German was asked to look further into the problem after he concluded a review last June on money laundering in Lower Mainland casinos.

Another report by an expert panel on money laundering recommends rule changes that would close loopholes in the real estate market and increase transparency around who owns property in B.C.

Eby said that report, along with German’s findings about the real estate sector, should be released in the coming days.

In an entirely separate report also released Tuesday, the C.D. Howe Institute estimates Canada fails to catch money launderers 99.9 per cent of the time.

The institute says in a news release that the protections against money laundering in Canada are among the weakest of Western liberal democracies.

“While it is impossible to estimate the exact amount of money laundering, a realistic estimate of the magnitude of dirty money laundered in Canada each year likely lies in range of $100 – $130 billion,” report author Kevin Comeau says in the statement.

Nearly 1 in 3 surveyed Canadians report having been victimized by financial fraudsters

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Benefits fraud is a real crime with real consequences

As part of Fraud Prevention Month this March, the life and health insurance industry is supporting Canadians in the fight against workplace benefits fraud. The Canadian Life and Health Insurance Association (CLHIA) is raising consumer education and awareness around health and dental benefits fraud through the Fraud=Fraud campaign.

Each year, insurance companies lose hundreds of millions of dollars to fraudulent health and dental claims. This fraud costs all Canadians through higher premiums, but can also result in serious criminal consequences. The CLHIA’s goal during Fraud Prevention Month is to help Canadians recognize fraud, understand how to avoid becoming involved in fraudulent activities, and increase awareness that fraud is a crime with real consequences. Resources to identify and report benefits fraud are available at the Fraud=Fraud website at fraudisfraud.ca

“Benefits fraud is becoming more widespread, in part because, as we’ve found in our research, many don’t understand that it is a crime,” notes Stephen Frank, President and CEO of the CLHIA. “Most people think, if you are caught, you would just repay the money. In fact, the consequences are bigger than that and can include the loss of your job and in some cases, ending up with a criminal record and jail time.”

Benefits fraud occurs when an individual intentionally submits false or misleading information about the health or dental benefits they received under their employer’s benefit plan. According to a survey conducted by Environics Research for the CLHIA, 75 per cent of Canadians incorrectly believe that the only punishment for benefits fraud is having to pay higher premiums, or be forced to reimburse claim payments.

Although there have been some cases where individuals did not understand that they were engaging in fraud, the industry is increasingly seeing evidence of organized crime, or unscrupulous service providers getting involved and reassuring their victims that what they are doing is normal or that they are entitled to the money.

“We are seeing more of these sophisticated schemes. In cases where we identify these larger frauds, companies may have to lay off large numbers of staff in response. This can have a huge negative impact on employers. That is one reason why we believe this Fraud=Fraud campaign is both timely and necessary,” added Mr. Frank.

About the CLHIA

The CLHIA is a voluntary association whose member companies account for 99 per cent of Canada’s life and health insurance business. The industry provides a wide range of financial security products such as life insurance, annuities (including RRSPs, RRIFs and pensions) and supplementary health insurance to more than 29 million Canadians. It also holds over $860 billion in assets in Canada and employs more than 155,000 Canadians.

SOURCE Canadian Life and Health Insurance Association Inc.

Police in Lethbridge, Alta., say senior lost $250K in sweepstakes scam

LETHBRIDGE, Alta. _ Authorities in southern Alberta are warning people to be aware after an 81-year-old senior was defrauded of $250,000 in a sweepstakes scam.

Police in Lethbridge say they were contacted last week by the woman’s son, who said his mother had been persuaded by scammers to send large sums of money _ mainly in the form of bank drafts _ almost weekly since last March.

She had been told she needed to send the money to cover taxes and insurance so she could claim a cash prize she had won.

Investigators have determined the senior initially received a letter purporting to be from the Bank of America and indicating that she had won a U.S. sweepstakes.

She believed the letter was authentic and over the next 10 months dealt with numerous scammers on the phone.

They continued to press her for payments and to provide her personal and banking information.

Police say the woman received hundreds of phone calls from the scammers, who in mid-January began to indicate they were from the Canada Revenue Agency and said that she now owed Canadian taxes.

“These types of scams are unfortunately very common and the criminals behind them can be very convincing,” Sgt. Paolo Magliocco of the economic crimes unit said in a release Monday.

The Better Business Bureau says that almost 500,000 people in Canada and the United States have reported being the victims of sweepstakes, lottery or prize scams in the last three years.

“It’s critical for people of all ages to be vigilant and understand that if something sounds too good to be true, it is,” Magliocco said.

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