A Woodbury company says it paid $735,000 to a prominent Twin Cities construction firm only to find out later that the money was never received because of an alleged cybercrime.

The payment was supposed to cover construction expenses for a new office and warehouse in South St. Paul. Instead, the project's developer, Beck Properties Minnesota, has been hit with more than $530,000 in liens by subcontractors who weren't paid for their work.

Beck last week sued its general contractor, Mendota Heights-based R.J. Ryan Construction, and FSA Title Services, the escrow firm commissioned to handle the money, for alleged negligence. Meanwhile, the U.S. Secret Service is investigating the missing money.

The case highlights the dangers of cybercrime for even the most routine forms of commerce.

Beck Properties in Woodbury is related to Beck & Co. Engineering, which is headquartered in South St. Paul. The new building would provide the Beck engineering firm with far more space than its current location.

Beck Properties took out two bank loans totaling $5.3 million to fund the project. Stillwater-based FSA Title Services was hired as the escrow agent in charge of disbursing the loan proceeds to contractors, according to Beck's lawsuit filed last week in Dakota County District Court.

According to the suit: Rick Beck, one of Beck Properties' principals, received a billing notice via email from a Ryan project manager. A few hours later, he received another email purporting to be from the same Ryan executive.

The second email requested that a $735,000 payment due -- along with all future payments -- be paid electronically. Beck forwarded the second email request to his bank, which forwarded it to FSA. The bank asked if this new arrangement would be possible.

FSA responded that it could not change the payment arrangement unless it received a signed and notarized authorization. FSA then sent an authorization form to the sender of the second email.

The form was completed and returned to FSA, which then wired the $735,000 purportedly to a Ryan account at a different bank. The account and the authorization form, it turned out, were fraudulent, and Ryan claims it never received the $735,000, the suit says.

"R.J. Ryan has claimed that [its project manager's] business email account was improperly accessed by a third-party fraudster," the suit said. Ryan claims it investigated its computer and email systems and found no evidence of "unauthorized access or hacking," the suit continued.

Thus, Beck Properties claims that the "misdirection of the loan funds was accomplished by one or more insiders to R.J. Ryan with unfettered access to R.J. Ryan's computer and email systems."

Ryan declined to comment for this story.

Beck Properties is suing Ryan and FSA Title for negligence and breach of contract. It's asking for a judgment against Ryan and/or FSA for damages, costs and liabilities incurred with the misdirected payment.

Beck also has sued eight subcontractors, seeking to remove the liens they filed. Beck claims Ryan was negligent by failing to reasonably secure its computer and email systems; it alleges that FSA was negligent by failing to adequately investigate and verify the fraudulent payment request.

FSA and its attorney did not respond to calls for comment. But FSA's attorney -- in a letter to Beck Properties' attorney that is part of the court record -- pointed the finger at Ryan because its email system was allegedly compromised, plus Beck and his bank.

Neither Beck nor the bank "did anything to validate the email request despite it being inconsistent with previous payments. ... FSA would have no reason to doubt the veracity of the email and the [payment] request," the letter said.

FSA also said in the letter that it is working with the Secret Service to recover the missing money. The Secret Service, in addition to protecting the president and other political leaders, investigates financial fraud, including cybercrime.

The Beck building project has been completed.