Lawsuit of the week: Grant MacEwan University files suit over multimillion-dollar email phishing scam

Grant MacEwan University in Edmonton | Photo: Angela Ostafichuk, Shutterstock

The board of governors of Grant MacEwan University in Edmonton is suing the Toronto-Dominion Bank (TD), the Canadian Imperial Bank of Commerce (CIBC) and a group of alleged fraudsters who used an email phishing scheme to scam the university out of $11.8 million.

The university filed a notice of civil claim in BC Supreme Court on September 27, naming the banks, Hoi Fu Enterprises Ltd., Mono Shoes Inc., Jehad Al Batniji and Kinglong Commerce Development Ltd. as defendants. According to the lawsuit, defendants Mono, Al Batniji, Kinglong and Hoi Fu used an email address similar to that of a contractor that the university had retained in 2015. The contractor, non-party Clark Builders, used an email address of “accountsreceivable@clarkbuilders.com,” while the alleged fraudsters used “accounts.receivable@clarkbuilders.com,” while masking the fake account’s “.us” suffix. 

Between August 10 and August 18, 2017, the university mistakenly sent payments totalling $11,881,707 to accounts controlled by defendant Mono Shoes, a company incorporated in Quebec. Days later, a Clark Builders employee inquired about the status of the payments, and the university then discovered that it had been corresponding with a fictional employee named James Ellis who had purported to work for Clark.

On August 25, a judge in Quebec agreed to freeze the TD Bank account, from which MacEwan seized $6.34 million. The university also retained lawyers in Hong Kong, who discovered $600,000 of the funds had been transferred from defendant Kinglong’s account to Hoi Fu’s TD account, and $400,000 had been transferred to Hoi Fu’s CIBC account.

The university’s board of governors seeks restitution of $11,881,707 and damages for fraud, conversion and unjust enrichment.

The allegations have not been tested or proven in court, and the defendants had not responded to the claim by press time.

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