There will be no delays to construction at the new Stanton Territorial Hospital despite one of its main contractors getting caught up in an online phishing scam.
That’s according to Marc Timberman, chief financial officer for Yellowknife-founded and Edmonton-based Clark Builders.
Timberman told News/North the construction company is out nearly $12 million after three payments, totalling $11.8 million, owed to Clark Builders by MacEwan University in Edmonton, was deposited into a fraudulent account in August.
The university disclosed on Aug. 31 it fell victim to the scam after staff failed to contact a vendor to verify if emails requesting a change in banking information were legitimate.
Timberman said the financial loss is on Clark’s books for the time being.
“We have not been paid by the university just yet but our systems and processes were not compromised in any way,” he said. “We were just used as a front. As far as our payments to contractors and third parties – I do not anticipate any disruption in that service.”
Timberman expects the university to make good on the missing $11.8 million in the coming weeks and Clark Builders is solvent enough to cover the lost funds until they are re-payed.
Both the university and his company are looking to see if any or all of the missing money is insured.
Timberman said Clark Builders employees in Yellowknife have been made aware of the situation through an internal memo to staff.
On top of the 280,000-square-foot hospital, the company’s Yellowknife contingent is busy. Clark Builders is also building an addition to Ecole Allain St-Cyr and a seven-storey addition to the Explorer Hotel.
In Hay River, Clark Builders is working on a $21.3-million rebuild of the community’s recreation centre.
Timberman said companies and individuals can learn from what his company and MacEwan University are going through.
“This not an isolated incident,” he said. “It’s an opportunity to look at your controls … Make sure you have the proper controls and authority to release payments, especially when dealing with banking or electronic transfers of money.”
Timberman said university auditors are working with Edmonton Police to try to solve the crime. He said he understands the scam may have been traced to Hong Kong, as well as other locations in Canada.
According to the company website, Clark Builders was founded over 40 years ago in Yellowknife by Andy Clark and Bill Giebelhaus in a small warehouse.