Former CAO accused of faking cyberattack to cover theft of $500K from Manitoba municipality

A former chief administrative officer stole more than half a million dollars from a western Manitoba municipality's bank account, and then tried to cover it up by fabricating a story about a cyberattack and altering documents, a lawsuit filed last month alleges.

The lawsuit, filed by the Municipality of Gilbert Plains at Winnipeg's Court of King's Bench on July 25, accuses then CAO Amber Fisher of breaching her contract through "criminal, fraudulent, and unlawful conduct."

It alleges that between September 2020 and July 2021, she made 33 transfers, totalling about $515,000, from the municipality's bank account to her own.

The municipality also accuses Fisher of falsifying bank statements to hide the transfers, giving councillors illegitimate reports that cleared her of any fraud, and making up a story that she had been the victim of a cyberattack.

None of the claims have been proven in court. A statement of defence has not yet been filed.

Gilbert Plains Reeve Jim Manchur says Manitoba RCMP have been investigating Fisher since last November.

"We're anxious to hear what the RCMP have found out," and whether criminal charges will be laid, he said. "It's still kind of early."

Neither Fisher or Mounties responded to requests for comment prior to publication.

Fisher began working for the municipality in 2018 as a senior administrative officer and was promoted to chief administrative officer in April 2020, the lawsuit says.

She was suspended from her role as CAO in the summer of 2021, after the municipality was notified by its credit union that significant amounts of money had been transferred to a bank account under Fisher's name, according to the statement of claim.

She told the municipality that she had been targeted in a cyberattack and that a fraud investigation had been started, the claim says. She returned to work a week after her suspension.

In late 2021, the municipality's auditors made multiple requests for bank statements from Fisher, according to the suit. In January 2022, the municipality said it would request the statements directly from its credit union.

Fisher finally provided bank statements to the municipality's auditors in March 2022, but they were "later determined to be modified from the originals," the lawsuit claims.

'Suspicious' payments flagged by employee: suit

The municipality also alleges Fisher gave them a draft of a fraud examination report around that time, which cleared Fisher of any wrongdoing. It was presented as though it were authored by someone else, the suit says.

Over a roughly two-week period in May 2022, the municipality met with auditors, who expressed concern about the bank statements, and with the alleged author of the fraud examination report. Around that time, an employee also notified the municipality of "suspicious payroll payments to Fisher," the suit claims. 

In late May, Fisher was suspended by the municipality again.

The accounting firm MNP was hired by Gilbert Plains to investigate the matter in June 2022. 

Fisher was placed on paid administrative leave a month later.

A forensic accounting and financial investigation report completed by MNP the following November said that Fisher had transferred around $532,000 of the municipality's money to her bank account.

MNP's report also said she sent herself payments for about 280 hours of overtime between April and May 2020, adding up to about $15,000 in gross earnings, according to the lawsuit.

Fisher's employment with the municipality was officially terminated after MNP submitted its report in November.

The suit claims Fisher lied when asked about the stolen money, did not co-operate with investigators, and either spent or disposed of all or a portion of the stolen funds.

She has repaid about $17,000 to the municipality, the statement of claim says, but the municipality alleges she still owes nearly $515,000. The municipality is suing to retrieve the rest of the funds, and for general, special and punitive damages.

"I'm hopeful that the RCMP were able to trace or look at where the funds might have gone or been used for," said Manchur.

Financial reporting 'vastly improved': reeve

The impact of the municipality's loss would be lessened if the money had been retrieved in a reasonable amount of time, said Manchur.

However, while the alleged fraud has affected the municipality, it has not had to scale back any planned projects, he said.

Gilbert Plains also filed a second lawsuit against several insurance brokerages on July 25, which was done "in the event that they don't cover our loss," said Manchur.

That statement of claim says the municipality was insured for crimes and theft, but has not been compensated for the money allegedly taken by Fisher or the costs of retaining MNP to investigate.

Manchur says a new chief administrative officer and assistant CAO have been hired. New control measures have also been introduced in the municipality's bookkeeping, and any funds disbursed by the municipality now have to be reviewed by multiple people.

"Our financial reporting has vastly improved, and I'm quite certain with what we've put in place … this should never happen again."