Home Canada Manitoba municipality loses half a million dollars in alleged e-transfer fraud

Manitoba municipality loses half a million dollars in alleged e-transfer fraud

by News Desk
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A local government in western Manitoba lost more than $500,000 from its bank accounts in an alleged fraud case involving multiple wire transfers of funds.

The Gilbert Plains Municipality sent a letter to residents last week informing them that the RCMP was investigating a cumulative loss of $514,571.86 that was transferred from the municipality’s bank accounts without Congressional authorization.

A letter dated November 15 says that an employee was “terminated for good cause.”

Jim Muncher, Reeve of Gilbert Plains, told CBC News, “Honestly, we were shocked that it happened.

“That’s kind of what happened in the last few months. We didn’t believe it was going to happen. And it happened.”

Manchur said fraudulent wire transfers from Fusion Credit Union accounts were discovered about a year ago and the municipality asked accounting firm MNP to investigate.

That investigation took several months and ended in November, he said.

Muncher said he didn’t want to speculate on exactly how or by whom the funds were withdrawn, aside from saying unauthorized wire transfers were involved.

He said the money was withdrawn through a number of transactions, but did not specify how many.

RCMP Spokesperson Sgt. Paul Manaigre confirms that the RCMP’s Financial Crimes Division is investigating. The case involves more than 30 of his suspicious transactions that occurred between April 2020 and June 2022, totaling him over $500,000.

On November 9, the municipality of Gilbert Plains reported losses to the RCMP based on one suspect who accessed the accounting software, Manaigre said.

“At this time, there is no indication that their systems have been compromised by an outsider or that a cyberattack was involved,” said Manaigre.

Municipality shares details

The local government has filed an insurance claim for the money and is awaiting a response as to whether the loss will be covered.

A letter to residents, signed by Manchur on behalf of the Gilbert Plains Council, reads: “While the monetary losses due to the alleged wire fraud are substantial, the municipality is fortunate to have strong financial reserves. The Council should work with insurance companies to seek financial compensation.”

Mantur said residents “appreciated the transparency of the letter” as rumors were likely circulating in the town.

“You are 100% assured that I and the council are fully committed to protecting the finances of the municipality,” he wrote in the letter.

“Maintaining the integrity of our local government funding and ensuring it continues to thrive as the community we all love and call home is of utmost importance to each and every one of us on the council.”

Allowing for the $500,000 loss, the municipal financial plan projected annual spending of about $4.4 million last year.

The letter to residents describes many changes made to financial controls.

  • Eliminate the ability to issue electronic funds transfers from municipal accounts without double authorization.
  • Council approval for all financial reporting.
  • Increase control to ensure that bank statements are reconciled on a regular basis.
  • Regular and up-to-date audits.

Gilbert Plains isn’t the only municipality in Manitoba that has seen significant losses from bank accounts in recent years.

The Westlake-Gladstone Municipality withdrew more than $472,000 from bank accounts in a series of fraudulent withdrawals in December 2019 and January 2020.

The RCMP has not filed charges in connection with the Westlake-Gladstone case, and municipalities are suing credit unions, insurers and insurance brokers for losses.

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