International Law

Web-Scamming the Lawyers

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Some hubris from the ABA, revealing their ignorance about marks and fraud.

If there's one group of professionals that might be regarded as immune from Internet scam artists, it would be lawyers. But attorneys are the marks in a series of scams preying on a lawyer's need for new business and a banker's trust in good customers.

Incidents stretch from Atlanta to San Francisco, and though the facts may vary, the cases fit a pattern.

A lawyer receives an e-mailed solicitation from an overseas firm to work as a settlement agent in the speedy collection of a debt from another company.

The debtor company sends a cashier's check to the lawyer. The lawyer deposits the check into his trust account, subtracts his fee, then wires the settlement amount to the client's account.

The trouble is the debtor company's check is bogus.

Rich Kolko, an FBI special agent in Washington, D.C., says these lawyer scams--while new to the profession--are similar to those in which recipients get e-mails from fake websites that look very legitimate, down to using well-established financial institutions' logos and trademarks

There is no reason to think that lawyers are immune from the conman's tricks. The trust fund is an inviting target because even in a small firm dealing in real estate a trust fund might be over $100,000 - meaning that the bogus cheque will clear, get charged back and incur a negative balance for the firm's other clients.

This above description of the fraud leaves out critical details. First, there has to be some level of urgency to the settlement. Something like the settlement offer is only good for 48 hours and your client "needs" an American attorney to attend to the settlement details immediately. Second, the contact is never by email, always by fax with follow up with telephone conversations. Third, the fee for the services performed must attract the attorney as something for nothing. Fourth, there can be no personal contact. Fifth, the contact information must match the altered cheque as closely as possible: if the cheque is from Corporation X, the contact information as close as possible. Finally, the mark must be kept on the phone an abnormally long time discussing irrelevant details of the settlement - which convinces the attorney that his or her time is very important, an important counter-weight against the original something for nothing attraction."

Full post as published by Misleading Advertising Law on October 24, 2008 (boomark / email).