FACTOR Canada — the non-profit granting body "dedicated to providing assistance toward the growth and development of the Canadian music industry" — has claimed to have had $9.8 million in federal grant money stolen by a "cyberthief" last spring, The Globe and Mail reports.
A big chunk of FACTOR's 2024 funding was allegedly taken from its Scotiabank account on June 12, about a week after about a week after the Department of Canadian Heritage made a $14.3-million deposit, according to documents filed with the Ontario Superior Court of Justice. The granting body had apparently moved $5 million of that money into a short-term investment account, but the cyberthief gained access to the remaining $9.8 million and transferred it to a different account with the same bank belonging to a numbered company.
The sole shareholder of said numbered company is Quebec's James Campagna, who allegedly proceeded to transfer $9.4 million of the grant money to an ATB Financial account under ownership of cryptocurrency platform VirgoCX Direct just minutes after the transfer to his Scotiabank account. From there, the funds were converted into USDC and were dispersed between various wallets.
In a filing, Campagna said that he and his company "vehemently" deny masterminding the theft, with an unknown user of FACTOR's account having allegedly contacted a company affiliate in the days beforehand with an order to buy 2,800 bitcoin mining machines and processed a transaction. He claimed that the remaining $379,000 — which was able to be recovered by the bank — was meant to be his sales margin for the bitcoin-mining machine transaction.
"This isn't just about numbers in a bank account — this is about real people, musicians, producers, managers, record labels, crew who work at venues," FACTOR board member Tegan Quin said. "The idea that this could affect the ability to fund future projects is deeply unsettling." FACTOR helped Tegan and Sara in their early career, and handed out more than $51 million in grants and emergency supports to the English side of the Canadian music industry last year.
The granting body is asking the court to help it to direct the bank and a customer involved with the transaction to help recover the funds through a primarily document-based process, while both Scotiabank and Campagna are campaigning for a full trial — including a formal discovery process, which would involved the disclosure of all relevant communications. A judge will hear arguments about how to proceed on Friday (November 29); meanwhile, the Toronto Police Service is said to be investigating the case, but FACTOR told the Globe and Mail that, as of late Friday (November 22), it had not been assigned an investigator.