Business News
Canadian Music Funding Body FACTOR Says It is the Victim of $9.8 Million in Cybertheft
A new report reveals that the major Canadian funding body, which distributes millions of dollars in financial support to musicians, labels and music companies, alleges that nearly $10 million was stolen from its bank account earlier this year.
Nov 25, 2024
FACTOR Canada says it has fallen victim to serious cybertheft.
In a new report for the Globe & Mail, Josh O'Kane details new court filings by the music funding body, which reveal claims that $9.8 million was stolen from a Scotiabank account earlier this year.
FACTOR distributes millions in funding to thousands of artists and music organizations in Canada — last year, the organization dispensed $50 million. Now, it's alleging that an amount equivalent to nearly a fifth of that annual distribution was transferred by a cyberthief to a numbered company.
James Campagna, shareholder for said company, then allegedly transferred $9.4 million to a cryptocurrency-owned account and converted the funds into crypto.
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The bank recovered $379,000, allegedly from Campagna's account, but the rest remains lost to FACTOR.
“This isn’t just about numbers in a bank account – this is about real people, musicians, producers, managers, record labels, crew who work at venues,” Tegan Quin, of pop duo Tegan and Sara and a board member at FACTOR, told The Globe.
If the funds aren't recovered swiftly, there's reason to be concerned that artists — who rely on FACTOR funding for recording, music video production, touring and more — could be affected.
The organization has already faced funding challenges in recent years due to reduced contributions from private radio broadcasters. Those challenges led the federal government to announce a $32 million boost to the Canada Music Fund, which supports FACTOR, earlier this year.
The theft was reportedly set in motion when a new user registered with FACTOR's Scotiabank account at the start of the year. Before then, only FACTOR accountant Marina Anianova could access the account's digital login. This new user registered under the name Sara Stasiuk, previously chief financial officer at FACTOR, but the granting body alleges that it was not informed by Scotiabank of the change in login access.
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Scotiabank is suggesting that Anianova was either involved in the fraud or fell victim to a phishing scam, while FACTOR asserts that four independent investigations found no evidence that the theft occurred due to failure on its part, The Globe reports.
Campagna denies involvement in the fraud, stating that someone using FACTOR's account contacted one of his affiliates to purchase 2,800 bitcoin mining machines before processing the money transfer.
FACTOR is citing a guarantee from Scotiabank that in cases of direct financial losses due to fraud, the bank will reimburse clients. Scotiabank is claiming that provision doesn't apply here. The bank and Campagna are both hoping the situation will go to trial, while FACTOR says it is seeking a less expensive documents-based process.
Billboard Canada has reached out to FACTOR for comment and will update this story as it develops.
