MacEwan University Victim Of $11.8M CEO Fraud



macewan-university.pngCBC News reported that an Edmonton, Canada university was the victim of a $11.8 million CEO fraud attack after staff failed to call one of its vendors to verify whether emails requesting a change in banking information were legitimate.

"MacEwan University discovered the fraud on Aug. 23 after the legitimate vendor, a construction company, called to ask why it hadn't been paid. Three payments were made to the fraudulent account: one on Aug. 10 for $1.9 million; another on Aug. 17 for $22,000 and a third on Aug. 19 for $9.9 million.

Most of the money — more than $11.4 million — has been traced to accounts in Montreal and Hong Kong, the university said in a news release Thursday."

This is a typical case where accounting employees were not trained using new-school security awareness training which includes frequent simulated social engineering attacks.

The funds have now been frozen, the university said, adding it is working with legal counsel in Montreal, London and Hong Kong to pursue civil action to recover the money. The status of the rest of the missing money isn't known.

University spokesperson David Beharry said the scammers sent emails that looked legitimate. "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." 

Advanced Education Minister Marlin Schmidt said in a statement he found it unacceptable that the university fell victim to this scam.  He's asked the chair of MacEwan's board of directors to report by Sept. 15 about how this could have happened. 

"While I'm told that MacEwan has put improved internal financial controls to help prevent it from happening again, I expect post-secondary institutions to do better to protect public dollars against fraud," Schmidt said in a statement.

"That's why I've instructed all board chairs to review their current financial controls." Full story here.


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Topics: CEO Fraud

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