Contractor suing after $98,000 transferred to fraudster

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This article was published 09/06/2025 (292 days ago), so information in it may no longer be current.

A Portage la Prairie insurance firm was allegedly scammed into paying nearly $100,000 to a fraudster instead of the contractor it was supposed to pay; now the contractor is suing the firm.

Trumbley Construction and Restoration Ltd. was contracted in September 2023 by the Portage la Prairie Mutual Insurance Co. to build a home for one of its clients, after his rural house was destroyed by a fire, court filings say.

During construction, Trumbley’s email account was “compromised,” says the statement of claim filed last month.

The unidentified person who took control of the email account got the insurance company to send a $98,000 payment to their bank account via an electronic-fund-transfer direct deposit, rather than by cheque, as the insurer had done for prior invoices, the filings allege.

The price of the contract was $366,709.39, plus GST.

The lawsuit accuses Portage Mutual and Centra Claims, a claims management firm working for the insurance company, of negligence.

“Both Centra Claims and Portage Mutual were negligent in failing to detect and prevent the fraud that occurred,” reads the court filing.

Only Portage Mutual, which has not yet responded to the lawsuit with a statement of defence, was named as defendant.

Vanessa Iafolla, a criminologist and anti-fraud consultant, said it’s difficult to say just how common such a scam is in Canada.

She pointed to a similar case in Ontario in which the City of Greater Sudbury was allegedly defrauded of $1.5 million via electronic funds transfer, after an individual reportedly infiltrated the email accounts of a construction firm hired to build an affordable housing project.

Sudbury’s government filed a lawsuit over the fraud in 2024.

“This kind of stuff doesn’t make it to court — it just doesn’t,” said Iafolla.

“I suspect the number (of frauds) is far more than we know, because people don’t tend to report these things to the police. Many businesses are inclined to keep it as private as possible so their own reputations don’t get damaged.”

She said she’s spoken to lawyers involved in similar cases.

“They only got far when the loss is significant enough that nobody is willing to settle,” said Iafolla.

In the Manitoba case, three other invoices were paid by cheques mailed by the insurance company, the court filings say.

The restoration company issued four invoices to Centra Claims to send to Portage Mutual after beginning to build the house.

“Portage Mutual never paid (one of four invoices) in the amount of $98,000 despite it being due and owing to the plaintiff as it completed the work pursuant to the contact,” reads the claim.

“The plaintiff followed up with Portage Mutual through Centra Claims on numerous occasions for payment.”

When Trumbley’s account was allegedly compromised, the hacker emailed an insurance company employee. The hacker claimed Trumbley had changed banks and requested a direct deposit form, the court filings claim.

The suit allege the insurance company and claims management firm were negligent given Trumbley had been in “constant communication,” including by phone, with the two firms.

The insurance staffer who changed the payment method received a “weird message” after emailing the unknown person, but failed to follow up with Trumbley through a “different form of communication such as a phone call,” the suit says.

The restoration firm alleges Portage Mutual and Centra Claims failed to verify the authenticity of the email, the direct deposit form and the bank account to which the money was sent.

Iafolla questioned whether the bank accounts have been identified.

The insurance firm used a payment method — EFT direct deposit — that contravened its own policies given the amount of cash involved, the suit claims.

The lawsuit seeks the $98,000 payment, plus costs and interest, as well as unspecified damages.

Iafolla said that sum is likely significant for the contractor.

“It’s the asymmetrical impact of it that always hits me. Yes, it’s a loss of money for the insurance company, but to the plaintiff, that’s a life-changing amount of money that’s lost,” she said. “That’s a person’s business.”

Iafolla said the court filings suggest staff at the insurance firm failed to follow their own procedures.

“This is a pretty significant divergence from that policy… these policies exist to prevent problems like this from happening,” said Iafolla. “It seems like a human error to me.”

erik.pindera@freepress.mb.ca