by John K. Etter.
Swindles involving money switching have probably been around since the beginning of money. You will remember, for example, in the movie, The Sting, the “pigeon drop” swindle in the opening scenes sets up the whole plot when the two third-rate hustlers do the switch on a courier carrying significant gambling proceeds.
In today’s electronic world, the money switch has gone digital and anyone who uses e-mail, even attorneys, are potential targets. The e-mail money switch scams are becoming more sophisticated over time.
The typical scam targeting lawyers begins with an email from someone who claims to be seeking legal services. These often read like a valid inquiry: “I am inquiring about the availability of your firm in the litigation of a default loan agreement” or “I need a contract agreement enforced.” Recent scams that Rodney & Etter and other law firms have received include:
- Unsolicited email requests for legal assistance in collecting money or judgments, frequently from people in other countries, sometimes apparently from actual professionals whose identities have been stolen;
- Real estate transactions for overseas clients, which may involve alleged stolen identities and innocent third party realtors;
- Bogus checks that appear to be issued by law firms and attempts to charge fees for processing the checks;
- Checks sent to law firms that appear to be payments for representing inmates;
- Impersonating lawyers or law firms to collect debts;
- Unsolicited requests from overseas clients for assistance in collecting alimony or child support
In many of these scams, the law firm that “bites” is sent a bogus foreign check and asked to immediately issue a law firm check for part of the amount, with the law firm retaining the rest as the law firm’s fee. When the foreign check does not clear, the law firm losses the funds it mailed to the scammer, and may end up facing civil or criminal check fraud or wire transfer liability.
While it seems obvious that one should not respond to these types of requests, law firms and individual practice attorneys fall victim to scams such as these on a regular basis. As a lawyer, you should always vet new clients through an established, systematic process to make sure the client and their issues are genuine. No attorney should ever issue a check from a trust account until the underlying funds have cleared your bank. That way, even if a scammer gets through your screening processes, you will not find yourself left holding the empty bag.
If you are targeted or are the victim of one of these scams, contact the Internet Crime Complaint Center (www.ic3.gov) and local or federal law enforcement. The Secret Service investigates bank fraud cases.
Tags: check fraud, email scams, John Etter, liability, Rodney & Etter