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FACTOR Canada Says It Will 'Vigorously' Pursue Recovery of Stolen Funds After Alleged $9.8 Million Cybertheft
In a new statement, the Canadian music funding body says that Scotiabank has participated "reluctantly" in a process to recover the $9.8 million that was allegedly stolen from FACTOR's bank account earlier this year.
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FACTOR Canada has released a new statement responding to a report that $9.8 million was stolen from the music funder.
In a statement on the foundation's website titled "FACTOR’s Response to the Scotiabank Cybertheft: The Facts," the company clarifies its side of the story that was reported on in the media and says that it aims to "defend the baseless allegations being made by Scotiabank against our systems and staff."
On November 25, The Globe and Mail reported that the major Canadian music funder — which last year dispensed over $50 million dollars — was the victim of cybertheft and was pursuing legal action in order to recover the funds.
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"It is true that FACTOR has been a victim of a significant financial crime that occurred on June 12, 2024, by way of a one-time fraudulent wire from our Scotiabank account on ScotiaConnect in the amount of $9,772,875.33," the statement reads.
But the response from FACTOR adds new details to the story, particularly in regards to Scotiabank's involvement.
The organization says it reported the crime to law enforcement on June 14, but that Scotiabank "has acknowledged it has never reported this financial crime to law enforcement."
The Globe reported that the theft was set in motion when a new user registered with FACTOR's bank account, using the name of a former chief financial officer at the company. FACTOR says that Scotiabank issued a digital token to the new user on January 18, with no notice given to FACTOR.
"The intruder gained access to FACTOR's account from an IP address that had never accessed our account and using an @outlook.com email, not a @factor.ca email address," the statement adds.
The statement also asserts that the money transfer was 300x larger than any transfer previously made from that account, "with no alerts to FACTOR of this highly unusual, suspicious, and illegal activity."
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The money was transferred to a company owned by a man named James Campagna, who then moved the money into an account owned by cryptocurrency platform VirgoCX Direct. Campagna told The Globe that the user had contacted one of his affiliates to purchase bitcoin mining machines ahead of the transfer.
"Throughout this process, Scotiabank participated reluctantly, and in the most limited fashion, only sharing even small amounts of information after being compelled to do so in court," the statement continues.
"Painfully, we have been working for months to recover our stolen funds through court action against Scotiabank, Mr. Campagna, and VirgoCX."
There's no mention of what the theft might mean for its grants and funding for artists and music companies, but FACTOR asserts that it is committed to recovering the money.
"We wish to state clearly and firmly that FACTOR will vigorously pursue the recovery of the stolen funds, defend the baseless allegations being made by Scotiabank against our systems and staff, and ensure that Scotiabank honours its security guarantee to customers, while making every effort to see that the criminals responsible are brought to justice."
Read FACTOR's full statement here.
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