A transport company in Drummondville, the victim of a huge fraud that plunged it into financial difficulty, is suing the Caisse Desjardins de Drummondville and the Fédération des caisses Desjardins du Québec for $1.5 million and interest for its inaction and negligence.
TYT Group has suffered a “chairman’s fraud” (see other text below) between June 8 and June 15, 2020 for a total amount of $2.380 million in five international fund transfers to Hong Kong and China, from Desjardins accounts.
The lawsuit alleges that the institution failed to act as a prudent banker, neither at the time of the transfers nor after TYT exposed the fraud. Worse: after refusing to support its client and denying its responsibility for the fraud, Desjardins placed TYT on special accounts the day the crime was discovered, which threatened the survival of the company of 225 employees .
TYT had been a Desjardins client for ten years during the events. As its operations are only in North America, transfers of funds to China represented atypical actions. In addition, Desjardins was aware that the security of TYT’s information had been compromised following the massive data theft of 4.2 million members revealed in June 2019.
In this context, the suit alleges, Desjardins “should have been immediately alerted by the obvious signals to the effect that TYT was the victim of fraud”, and should have taken preventive action.
No verification…
On June 8, 2020, TYT’s new chief accountant received an email from a fraudster posing as President Patrick Turcotte. This false president has mandated the accountant to manage a priority file and asked her to follow the instructions that would come from a Deloitte lawyer.
Photo taken from Groupetyt.com website
Patrick Turcotte, the big boss of the company, whose identity was usurped by scammers in the context of a “president’s fraud”.
This is how the series of fund transfers began, involving hundreds of thousands of dollars, without the Desjardins staff, who nevertheless had to follow the company’s finances closely, verifying the legitimacy of the transfers. transactions.
… except at the credit limit!
Desjardins called TYT when the line of credit limit was reached. Faced with the disbelief of the real Patrick Turcotte, the account manager finally noticed the fraud. Who should be contacted urgently to recover the lost sums? No one could tell. It was 4:30 p.m. and the international services department was closed!
It was finally on the advice of the president of the National Bank (BN) that TYT was able to take steps, at its own expense, which finally enabled it to recover some US$700,000.
SCAMPS IN ACTION AT GROUPE TYT ON JUNE 8, 2020
- The new chief accountant receives an email from a fraudster who usurped the identity of President Patrick Turcotte.
- The false president mandates the accountant to close a takeover bid, a high priority file.
- He insists on the confidentiality of the transaction: everything will be done by email.
- He asks to follow the instructions that will come from lawyer X.
- He inquires about the balance of TYT’s accounts before making transfers.
The president’s fraud, a well-known scheme for banks
Chairman’s fraud is a type of fraud that businesses have fallen victim to and that banking institutions have been well aware of for more than a decade.
The phenomenon has grown during the pandemic in the context of telework. It is in fact a kind of phishing by email or text message during which the fraudster manipulates an employee by giving him importance: he has the privilege of being chosen by the “president” to carry out a special task. .
Obviously, this task will require a transfer of funds and very often allow the disclosure of confidential information, whether banking information, passwords or customer lists.
The employee through whom the fraudster accomplishes his crime is not chosen at random, it is a person who has the desired access. The fraudster will have learned about her through social media and gathered enough information to make her communications credible.
Costs of over $26 billion
Recent cybercrime statistics indicate that the president’s fraud has stolen more than $26 billion worldwide. Phishing, which includes the CEO fraud, is one of the most reported scams at the Canadian Anti-Fraud Centre. In the first six months of 2021, reported losses were some $26 million domestically.
In 2014, Olymel and Unimat had each lost more than $4 million. In 2020, Dancause was robbed of $400,000. And we could add to the president’s list of fraud victims.
In the case of TYT with Desjardins, the lawsuit led by lawyers Caroline Biron and Carolan Villeneuve mentions that the institution created, at the end of 2019, a security office in order to better protect its customers. However, five suspicious transfers were made in one week without his staff informing the real president, Patrick Turcotte.