A Nova Scotia town had to get a court order and spent almost eight months trying to recoup nearly half a million dollars it had been defrauded out of by an Ontario man posing as a construction executive, a situation municipal officials say won’t happen again because of stronger internal controls.
Those are some of the details included in an access-to-information request that reveals what Bridgewater — a town with fewer than 9,000 residents along Nova Scotia’s South Shore — did to get the money back, how much it spent on legal fees, and the frustration officials had with banks it felt were unhelpful in resolving the matter.
Bridgewater’s woes began in October 2019 when an Uber driver from Brampton, Ont., posed as an executive with Dexter Construction and requested forms to allow the Bedford, N.S.-based company to receive payment via electronic transfer rather than cheque. The individual, Ayoola Ajibade, had no connection to Dexter, which does work for the town.
At the time, the town was recommending its vendors switch from being paid by cheque to electronic funds transfer, so the request didn’t seem unusual.
After Bridgewater received an invoice from Dexter Construction for legitimate work, it wired a payment of $490,930.43 in early November into a Scotiabank account in Brampton that belonged to Ajibade.
It would be another six weeks before the town learned of the fraud.
How the town found out about the fraud
In an email dated Dec. 18, 2019, Lee Wallet, a banker with BMO in Bridgewater — the bank that handles the municipality’s finances — asked the town’s accounts payable clerk to check whether the $490,930.43 transfer was legitimate after being tipped off by Scotiabank.
Later that day, the town’s chief administrative officer, Tammy Crowder, wrote an email to Mayor David Mitchell.
“The account has been frozen since 2018 for similar activity (so I question how the [money] got put in the account in the first place),” she wrote.
‘It’s only money,’ says mayor’s email
The mayor replied that he expected there would be a way of getting the money back.
“I hope staff are OK and nobody is feeling like this is their fault,” he wrote. “It sucks but nobody did this intentionally and it’s only money. Nobody was hurt.”
On the same day Mitchell sent that email, the town’s director of finance, Dawn Keizer, noted two other transfers had been sent to the fraudulent account:
$226,583.41 on Dec. 17. “Hoping it can be stopped. Please advise,” Keizer wrote to Wallet.
$17,040.75 on Dec. 17.
A Dec. 20, 2019, email from Crowder to the mayor said those two payments were rejected by Scotiabank and the money was returned to the town.
With the fraud identified, town officials became frustrated with BMO and Scotiabank’s handling of the situation.
On Jan. 23, 2020, Keizer told Crowder that she was “not optimistic” Scotiabank would be helpful.
“In fact, they seem to be just the opposite, which has been very frustrating for us,” Keizer wrote to the CAO.
An email from Wallet to Keizer later that day noted the “next steps” were with Scotiabank’s fraud department.
Town hoped to avoid legal action
The following day, an email from Mitchell to Keizer and Crowder said he had contacted the head of Scotiabank’s fraud department with the hope it would “expedite the matter and hopefully avoid a full-blown court order.”
An email a week later from Keizer to Crowder questioned BMO’s perceived inaction. The email obtained by CBC News was mostly redacted, but asks, “Is there a reason BMO can’t act on our behalf in this matter?”
Four months later, Scotiabank still hadn’t returned the money.
Bridgewater, N.S., Mayor David Mitchell is shown in a file photo. He says the town has implemented stronger internal controls to ensure this type of fraud won’t happen again. (Stephanie Blanchet/CBC)
“It’s frustrating that we can’t get costs or damages though, given that we’ve incurred legal costs and they’ve had our money for all these months,” Keizer wrote in a May 22, 2020, email to two town officials and the outside lawyer the town had hired.
“Disappointing that they wouldn’t at least offer to pay interest on our money.”
On Aug. 10, 2020, a Nova Scotia court ordered Scotiabank to pay back the money after the town pursued legal action.
How much was spent on legal fees
An email from the town’s CAO to Bridgewater council four days later revealed the legal fees spent were an estimated $5,000.
By the end of the month, the town’s missing money, $490,930.43, was back in its account.
It would be another year before the case against the accused went to court.
A Jan. 11, 2022, email from the mayor noted that “people think we were easily duped.” Mitchell called it “a sophisticated scheme” and noted, “Because the [CBC] article says he was just an Uber driver, people think he just called and asked for $500,000.”
A reply from the town’s CAO noted they “don’t want to hang staff out to dry nor give away internal control processes.”
Later that day, Patrick Hirtle, the town’s manager of community attraction and communications, sent an email to town council and the CAO with “talking points” regarding the fraud.
Messaging on fraud origins
The email said the “strength of our internal processes and the working relationships with our banking institutions allowed this elaborate fraud to be caught before it could go any further.”
In an interview, Mitchell told CBC News that while the first fraud went undetected by the town, its internal processes played a role in catching the second and third transfers.
When asked why he responded, “It’s only money,” when told about the missing $490,930.43, Mitchell said he was speaking solely out of concern for the well-being and safety of his staff.
“When you have mistakes, you can have loss of life, you can have someone physically injured,” he said. “That was my comparison … I wouldn’t want people to kind of think, ‘Oh, the mayor’s just throwing around money.'”
He said the town has strengthened its controls to prevent this kind of fraud from ever happening again, but declined to provide specifics, likening it to giving away “the combination to the safe.”
Mitchell said that because governments post so much information and the email addresses of their employees publicly, it makes them a target for fraud.
“Fraud is being constantly attempted on municipalities and provincial and federal governments, daily,” he said. “And in this case, one slipped through. But we’ve learned from it, we’ve changed the processes and it’s not going to happen again.”
What the banks are saying
Asked for comment about the frustration town officials felt with the banks, Scotiabank declined comment, saying the matter was before the courts, while BMO said it has strong security measures in place to protect customers.
Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.
On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.
The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.
“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.
Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.
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Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.
Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.
Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.
Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.
Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.
The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.
Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.
Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.
On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.
Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo (REUTERS / Reuters)
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
Oil prices initially spiked on Friday due to unconfirmed reports of an Israeli missile strike on Iran.
Prices briefly reached above $90 per barrel before falling back as Iran denied the attack.
Iranian media reported activating their air defense systems, not an Israeli strike.
Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.
Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.
The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.
Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.
However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.
Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.
The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.
The Isfahan province is home to Iran’s nuclear site for uranium enrichment.
“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.
The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”
At the time of writing Brent was trading at $87.34 and WTI at $83.14.
