International Law

"Korean" Company Targets Law Firm in Email Scam -- Law Firm Sues Banks

I've written often on email scams targeting attorneys in the US. A foreign individual, masquerading as a company, persuades an American attorney to deposit what appears to be a genuine bank check for a large sum. The check is bogus. The bank "verifies" the bogus check. The lawyer then, trusting to the four winds, wires a sum to a foreign account. The check bounces. Who is responsible for the overdraft? They fight it out, as the recipient of the cash enjoys his wealth.

This suit may shed light on one bank's internal procedures used to "verify" -- one uses the term lightly -- a bank check purportedly issued by that bank.

On Tuesday, in what appears to be a ruling of first impression in a New Jersey federal court, Magistrate Judge Michael Shipp granted Freedman & Gersten's motion to compel discovery, giving BofA until Dec. 22 to turn over documents about the probe.

The bank also must produce documents about its procedures for handling suspicious activity and risk management and about the conduct of a bank officer also sued for allegedly assuring the law firm that a check received from a new client in Hong Kong was a good one.

But why would anyone accept a check from a foreign entity, rather than a cash wire, in this day and age? Because the scammer will, naturally, refuse to give up any of his money. He wants yours!

Full post as published by Asia Business Intelligence on December 13, 2010 (boomark / email).