In a letter dated Tuesday, June 2, 2020, the Sandspit Volunteer Fire Department disclosed to residents that it had accidentally sent a wire transfer of almost $100,000 to fraudsters in May. The funds were intended for the purchase of a used fire truck and the department is unsure if they can be recovered. (Pixabay photo)

Haida Gwaii firefighters accidentally send $100K to fraudsters in elaborate scheme

RCMP, Northern Savings Credit Union working to recover funds, but ‘unsure if that will be possible’

A volunteer fire department in coastal B.C. accidentally sent almost $100,000 to fraudsters last month, and is unsure if the funds can be recovered.

In a June 2 letter to Sandspit residents obtained by the Observer on Wednesday (June 17), the Sandspit Volunteer Fire Department says the wire transfer of $95,058 was intended for a used fire truck, funded through Sandspit’s Vibrant Communities grant money.

The elaborate scheme played out in May.

According to the department, a deposit was successfully made to a bank account associated with Rocky Mountain Phoenix, the company supplying the used fire truck.

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It’s believed that during this time, a fraudster hacked into the email address of the department’s volunteer project manager and was able to monitor email correspondence.

The fraudster created an email address almost matching the representative from Rocky Mountain Phoenix, but with the word “Mountain” being spelled “Mountian” in the email address.

The department says that eyebrows were raised when the scammer requested the second and final payment for the truck be made to an American bank account that was different from the account the deposit was sent to, but when the project manager asked why, they received an email and phone call from the fraudster pretending to be the chief financial officer and other representatives from Rocky Mountain Phoenix.

The phone number the scammer used was not an official company number, but “this did not draw any suspicion as some of their employees were working from home because of COVID-19,” the letter reads.

The department then forwarded the fraudulent wire transfer information to the Northern Savings Credit Union to process the wire.

The fraudster went so far as to issue forged invoices, receipts and wire transfer details with signatures and on letterhead, the letter added, as well as provide phony truck shipping and border crossing details.

ALSO READ: Police seize 1,500 fake COVID-19 tests being sold in B.C.

The scam was realized by the firefighters on May 25, when a real Rocky Mountain Phoenix salesman indicated the second payment was still needed in order to ship the truck.

The theft has been reported to the RCMP and the credit union is working with other banks to recover the funds, however, the letter said “it is unsure if that will be possible.”

There is still space in the project budget to buy the truck — an additional $131,000 originally intended to purchase 11 sets of breathing apparatus and spare air cylinders, according to the fire department. Feedback from the public is being requested before June 30.

One option is to purchase the truck and use a remaining amount of $34,000 to purchase only some of the department’s breathing apparatus. The other option is to purchase the truck and use an additional $95,058 worth of Vibrant Communities funds to allow for the full project to be complete.

Both options include purchasing the truck because the deposit was already sent.

“We understand that there are other projects being contemplated for vibrant community funding,” the letter reads. “We will respect the will of the community on how to move forward.”

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The letter also says the volunteer project manager has taken action to improve their internet security after finding out about the theft and the department will implement a wire transfer checklist prior to issuing any future wires.

The elaborate scheme has been incredibly stressful and emotional for volunteer members, the letter continues.

“It has been a humbling learning experience on our part, and we have beaten ourselves up pretty badly over the past few weeks, but the important takeaway from this is that we have all acted in good faith toward [the] goal of keeping our firefighters and the community safe,” the department says.

“We are volunteers and we manage fire protection in the community off the side of our desks, and we are doing the best that we can.”

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Sgt. Greg Willcocks of the Queen Charlotte RCMP confirmed that the detachment was aware of the fraud and the “very active” investigation was ongoing.

“The best thing that I can tell people is if they receive any suspicious phone calls where somebody is looking to get information from them or asking for money, please call the detachment,” Willcocks said.

“The same goes for anything online. If you receive any suspicious emails, text messages or links, please don’t respond to them. Call the detachment and we can look into them.”

Anyone who receives a scam is also asked to report it to the anti-fraud centre at www.antifraudcentre.ca.

ALSO READ: Gwaii Trust increases COVID-19 Emergency Response Fund to half a million dollars

The Vibrant Haida Gwaii Communities Grant was established by the Gwaii Trust Society to fund community infrastructure projects. Through the grant, a commitment was made to seven local communities, including Sandspit, that they could apply for and receive $250,000 every year for four years, beginning in 2016.

Carla Lutner, chief operations officer for the Gwaii Trust Society, told the Observer the department had applied for a grant that was approved on March 20, totalling $283,153.

The total grant was more than $250,000 because unused grant money from previous years carries over.

ALSO READ: Sandspit firefighters busy

Rocky Mountain Phoenix is a firefighting equipment supplier headquartered in Red Deer, Alberta, but the company also has vendors in the U.S.

Richard MacMillan, the CEO of Rocky Mountain Phoenix, told the Observer the company was horrified when it discovered the incident had occurred.

“We know how important and hard-won these funds are that are raised and provided to volunteer fire departments to provide the important equipment needed to protect their first responders and the communities they serve,” MacMillan said in an emailed statement. “These kinds of scams and fraudulent activities are everywhere and seem to be getting more and more sophisticated. We all need to be as vigilant as possible to protect each other from this kind of criminal activity. Our heart goes out to this customer.”

Bob Marshall, president and CEO for the credit union, said he was not able to comment due to confidentiality.

The Observer has reached out to the fire department.

Based on the letter, it was unclear if the $95,058 wired to the fraudster was in U.S. or Canadian dollars.

Do you have something to add to this story or something else we should report on? Email:
karissa.gall@blackpress.ca.


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