MEMPHIS, Tenn. — A local construction company is suing the Memphis River Parks Partnership for sending nearly $400,000 to a scammer instead of them.
According to documents filed in Shelby County Chancery Court, Nickson General Contractors had a long-standing deal with MRPP to build the Cossitt Library downtown, a roughly $5 million project.
President Octavius Nickson said they received five payments on the project, but not the sixth.
“We had a formal form of payment that we set up at the beginning of the project,” he said. “We received paper checks from (MRPP) and then on pay app six, unbeknownst to me, we were hacked.”
Court documents obtained by ABC24 show that in 2020, someone hacked into Nickson’s email and sent multiple emails claiming there was a problem and they needed a wire transfer to a Michigan bank instead of paper checks.
“They never said, ‘Hey, we got this request from you all, is it OK? To do so we need this document or that document,’” Nickson said. “There was none of that. They just decided to send $400,000 to a bank in Michigan.”
In their counter suit, MRPP claims they fulfilled their end of the contract and that they brought up the payment change on multiple occasions saying:
“The foregoing request, as noted on the project tracker, was discussed by the Partnership with Nickson during status calls on September 8th, September 21st, and September 23rd.”
But court records show the hacker made a rule where all emails about payment got sent to a separate folder.
“There was a phone call I received that was kind of weird that said, ‘Do you send your own emails?’ And I said, ‘Yes.’ And they were like, ‘Oh just checking.’ And then that was it,” Nickson said, recounting his contact with MRPP.
MRPP says they should’ve been notified sooner saying:
“Only after the Partnership advised Nickson that it had remitted funds for Pay Application No. 6, did Nickson represent to the Partnership that its network had been breached and its agent’s email…compromised.”
Cyber security expert Jonathan Parker says MRPP should’ve recognized the signs of a potential scam.
“Anything that deals with, ‘Hey change where my money goes, that should be a red flag,” he said.
MRPP sent the following statement to ABC24 on Monday:
“Memphis River Parks Partnership remains committed to being a responsible fiscal steward of community resources. We take pride in the fact that the construction of Tom Lee Park set a milestone with 42 percent MWBE participation, significantly exceeding the City of Memphis goal of 25 percent for the project. We have a long history of paying every contractor in full and on time. As a mid-sized nonprofit, we understand the importance of paying people promptly.”
Nickson says he wants the full $378,204.50 he is owed plus interest, in addition to attorney’s fees.
Both parties are due in court in September 2024.
The incident is similar to the phishing scam the City of Memphis fell for in 2022, where the city one day received a request to change account details and then wired $773,000 to that account.