A Memphis construction firm, Nickson General Contractors, is in a legal dispute with the Memphis River Parks Partnership (MRPP), alleging the nonprofit organization sent nearly $400,000 to a fraudulent entity. According to a report by WREG, Chris Hendrix, COO of Nickson General Contractors, claims the funds for work performed on the downtown Cossitt Library were erroneously wired to a bank in Michigan.
MRPP is accused of falling for a phishing scam in 2020, in which a cyber thief impersonated Nickson and requested the payment to be sent via wire transfer. Despite this, MRPP has stated they have historically paid contractors fully and promptly, a notion echoed in a statement to ABC24. They claim to have reached a notable achievement with a 42 percent MWBE participation during the construction of Tom Lee Park, surpassing Memphis City's goal of 25 percent. However, Hendrix remains adamant about recovering the owed amount, stating, as per WREG, "It’s the work that we’ve done and we just want to get paid for the work that we’ve done."
Further details from an ABC24 report indicate that Nickson General Contractors had received five payments via paper checks before the fraudulent wire transfer. Octavius Nickson, the company's president, recounted an odd phone call question about whether he sends his emails, suggesting a missed opportunity by MRPP to validate the payment change request.
The situation resembles a similar scam in 2022 with the City of Memphis, which lost $773,000 to a phishing scam after a change in account details was requested and consequently processed. Cybersecurity expert Jonathan Parker suggested that any request to change payment details should raise an immediate red flag, according to his interview with ABC24.
Meanwhile, a brief statement by the Memphis Holler confirmed the ongoing lawsuit between Nickson General Contractors and MRPP, with the construction firm seeking the nearly $400K they allege to be owed, in addition to interest and attorney's fees. The outcome of this litigation will potentially clarify both the roles and responsibilities of organizations in avoiding and addressing sophisticated cyber scams.
“A local construction company is suing the Memphis River Parks Partnership for sending nearly $400,000 to a scammer instead of them.”https://t.co/L5VcC4WvpH
— The Memphis Holler (@MemphisHoller) July 30, 2024
