In a single transaction, taxpayers lost $1.04 million after the City of Saskatoon fell victim to a fraud scheme, a city official revealed Thursday.

City manager Jeff Jorgenson told media Thursday afternoon that an apparent fraudster had stolen the identity of the chief financial officer of a construction company whom the city deals with.

The unidentified scammer then contacted the city, asking to change the company's banking information, Jorgenson said.

The $1.04-million payment from the city then went to the fraudster's account, rather than the company's.

The city learned it had been duped on Monday and went public with the incident in the interest of transparency, and to warn other organizations, the city manager said.

Saskatoon Police Service issued a public alert Tuesday that didn’t specifically mention the city, but warned generally of scams that target finance and human resources professionals.

Jorgenson declined to name the company that had been impersonated, only saying it was a “prominent” local construction firm.

Focus on recovery

While there’s no guarantee any portion of the funds can be recovered, Jorgenson said the city is “cautiously optimistic.”

“The banks are working on it, the police are working on it, we have our internal auditor working on it as well, so that's where our priority is,” Jorgenson said.

Saskatoon Mayor Charlie Clark said he also believes there is a chance the funds will be recovered, but for now he hopes the incident can serve as a cautionary example.

"The world is changing quickly, the way that identity theft and some of these issues [are] happening. It can affect anybody, we're going to make sure it doesn't happen again at the city."