Law Firms Need To Pay Attention on Emails Scam

FraudsWatch.com
Attorneys Need to Understand How Such Cons Work And to Protect Themselves Against Fraud

<p>Cyber criminals&comma; based overseas and concentrated in Nigeria&comma; send scam emails to <strong>law firms<&sol;strong> on a daily basis in an effort to fraudulently extract IOLTA funds and enrich themselves&period; Because of the increasing prevalence of these ventures&comma; attorneys need to understand how such cons work and to protect themselves against fraud&period;<&sol;p>&NewLine;<p>The scam begins with an email purportedly from a prospective client who needs legal help&period; The scammer&comma; after obtaining an engagement letter&comma; advises the <em>law firm<&sol;em> that the matter is going to be resolved and the adverse party will send a settlement check to the lawyer&period; The check quickly arrives and the lawyer will typically deposit it into the firm’s IOLTA account&period; The criminal then tells the <strong>law firm<&sol;strong> that they can keep their fee from the proceeds of the recently received check but should wire the difference to the scammer&period; The wire instructions will always be to an overseas bank&comma; typically one in Japan&period; The scammers use the anonymity of the internet to create virtually untraceable email accounts&comma; and ultimately untraceable bank accounts&period;<&sol;p>&NewLine;<p>The con oftentimes originates in Nigeria&period; Lagos&comma; soon to be one of the most populous cities in the world&comma; is the unofficial capital of this fraud&period; In the hoax directed at law firms&comma; the attorney is always sought for a contingency or for a very simple matter&period; After legal representation has been formally obtained and with a retainer agreement in place&comma; the scammer advises that the debt or money sought from a third party will be immediately paid to the lawyer&period;<&sol;p>&NewLine;<p>Importantly&comma; the scammer requests that the attorney not contact the debtor because the client wishes to maintain a working relationship with the debtor&comma; perhaps in a divorce scenario where the obligor is a former spouse of the client&period; Within days&comma; a check &lpar;typically for several hundred thousand dollars&rpar; is delivered to the law firm and deposited in the firm’s IOLTA account&period; The law firm is entitled to the contingency fee&comma; and is instructed to send the balance to the scammer&period; In all cases&comma; the crook will request an immediate wire transfer to a foreign bank&period; From the scammer’s viewpoint&comma; he must receive the wire payment before the law firm discovers that the check it deposited into its IOLTA account is not valid&period; Such fraudulent checks are difficult to identify because they are typically real checks that have been only slightly altered so as to be consistent with the fraud&period;<&sol;p>&NewLine;<p>The reader may think a request for legal services from a prospective client with a suspicious email account &lpar;e&period;g&period; haydn&commat;diesseweb&period;it&rpar;&comma; domiciled and traveling out of the country&comma; with an unidentifiable foreign accent and not coming to the law office in-person&comma; is nothing more than a laughable hoax&period; And yet&comma; untold losses are caused by these schemes annually&period; The schemes themselves violate Section 419 of the Nigerian criminal code&comma; and are sometimes called a &OpenCurlyDoubleQuote;419 fraud&period;”<&sol;p>&NewLine;<p>The ARDC has issued an alert – https&colon;&sol;&sol;www&period;iardc&period;org&sol;information&sol;alert&period;html – and has provided tips to lawyers to be on the watch for this scam&period; Among the ARDC’s cautions&colon;<&sol;p>&NewLine;<ul>&NewLine;<li>Wait for a check&comma; even a cashier’s or certified check&comma; to clear before using the money&period; A provisional credit&comma; issued within a few days after the deposit&comma; does not mean that the check is good&period; Verify the authenticity of the check with the issuing bank&period;<&sol;li>&NewLine;<li>Be suspicious of a client who insists that you send funds by wire transfer or otherwise pressures you to act quickly&period;<&sol;li>&NewLine;<li>Take steps to verify that the &OpenCurlyDoubleQuote;client” is who they say they are&comma; particularly if there are no face-to-face communications with the client&period; If you are dealing with a stranger&comma; verify the person’s identity using reliable third-party sources&period;<&sol;li>&NewLine;<li>If you have deposited a check that bounces&comma; the bank may withdraw the original amount credited and that may result in the conversion of other clients&&num;8217&semi; funds in the trust account&period; If your trust account does not have enough money to cover the deduction&comma; the bank may freeze your trust account or the bank may sue you to recover the funds&period; See Wachovia Bank v&period; Bartko&comma; No&period; 1&colon;08-CV-2636 &lpar;Ga&period;&rpar;<&sol;li>&NewLine;<&sol;ul>&NewLine;<p>&nbsp&semi;<&sol;p>&NewLine;<p>Although the ARDC has provided a number of agencies that can be contacted if you receive a counterfeit check – such as the FBI&comma; the FTC&comma; and the U&period;S&period; Postal Service – this type of scam is one that is too common – and the size of each transaction is typically too small – for federal agencies to allocate resources to help&period;<&sol;p>&NewLine;<p>The key element of the Nigerian scam is that a check is received by the law firm&comma; but the firm is asked to wire funds out&period; The delay in time between the bank’s reporting the check as having &lpar;provisionally&rpar; &OpenCurlyDoubleQuote;cleared&comma;” and discovery of the con&comma; provides time for the scammer to abscond with the law firm’s IOLTA funds&period;<&sol;p>&NewLine;<p>In order to protect against this&comma; each check received must be critically evaluated&comma; and discussed with the issuing bank to determine the check’s validity&period;<&sol;p>&NewLine;<p>The Nigerian scam represents a significant <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;" title&equals;"financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"837">financial<&sol;a> and reputational risk for law firms&period; Lawyers need to know their clients&period; Any prospective client who does not appear in person should be viewed cautiously&period; A law firm should be suspicious of any request by a client to wire funds&comma; and that suspicion should rise to the level of alarm if the wire is bound for a foreign country&period; Any client who deposits a check should receive a check – not wired funds – from the law firm because the increased time required to send a check coupled with the increased time for the check to clear may provide protection to the law firm&period; The provisional clearing of the scammer’s check is meaningless because even when a check provisionally clears&comma; the law firm is still responsible if the check later turns out to be fraudulent&period;<&sol;p>&NewLine;<p>The FBI and other federal agencies have been unable to curb the Nigerian scam&period; The scale of the swindle has increased over time&comma; and the methods used by the perpetrators have become more sophisticated&period; However&comma; with an understanding of the basic premise of this fraud&comma; a law firm can minimize the risk of falling victim to it and &lpar;unwittingly&rpar; contributing to Nigeria’s expanding economy&period;<&sol;p>&NewLine;<p><a class&equals;"btn btn-default" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;email-scam-richard-co-associates-attorney-at-law-solicitors-301&sol;">Examples Of E-mail From Law Firm<&sol;a><&sol;p>&NewLine;

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