As reported in the media, 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.
In addition to what has been reported, we wanted to clarify several additional key facts.
FACTOR alerted Scotiabank to being locked out of its online account on June 13, 2024.
Once it had been ascertained that a theft had taken place, FACTOR immediately reported this to law enforcement, on June 14, 2024. Scotiabank has acknowledged it has never reported this financial crime to law enforcement.
FACTOR took swift and considerable steps within hours of learning of this crime to retain expert, third-party, independent investigators to conduct a thorough investigation into all aspects of this fraudulent one-time wire, which was more than 300x larger than any wire the organization has ever done, executed by an unauthorized user, with no alerts to FACTOR of this highly unusual, suspicious, and illegal activity.
FACTOR has since learned that Scotiabank issued a digital token to the unauthorized intruder on January 18, 2024, without ever alerting FACTOR to this fact. 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.
It took more than five months before Scotiabank disclosed that the sole legitimate FACTOR employee with digital access, along with FACTOR’s CEO, were deleted from Scotiabank’s system as authorized users within minutes of the unauthorized wire. No alert advising of the deletion of FACTOR’s personnel was provided to FACTOR. Nor was there any notice from Scotiabank about this suspicious activity. The funds were wired to a Scotiabank account of a numbered company in Quebec owned by James Campagna and immediately wired by Mr. Campagna to VirgoCX to purchase cryptocurrency.
FACTOR has spent substantial time and funds on several independent investigations, all of which concluded no breach of FACTOR’s systems occurred. FACTOR’s board retained expert investigators and forensic teams and stands behind their findings – as all four independent investigations have found no evidence that FACTOR or any of their employees, agents, or contractors were in any way responsible.
Considerable steps to ensure all FACTOR systems and accounts were secure have been and continue to be in place. We are confident this incident was isolated to one of our Scotiabank accounts where we no longer do daily banking, and all our remaining systems and accounts are secure.
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.
Painfully, we have been working for months to recover our stolen funds through court action against Scotiabank, Mr. Campagna, and VirgoCX.
While this matter is before the courts, FACTOR is limited in what it can say. However, 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.
Until this matter is resolved in court, FACTOR will continue to honour its commitments to the Canadian Artists and music companies it serves.