Internet scam strikes again -new target audience

topic posted Wed, June 3, 2009 - 12:50 PM by  Norma
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I think many of you are aware of the emails trying to attract and scam dance teachers. Now they are targeting attorneys! I just received this from the State Bar of MI.

Attempted Internet Scam involving Michigan Trust Account
A Michigan law firm recently narrowly avoided an internet scam that has ensnared some attorneys in other states. We are reporting the scam to put members on notice to exercise extra diligence when presented with circumstances similar to those noted below.
The scam works like this - the law firm receives a referral from someone posing as an outstate attorney to enforce a simple contract dispute or collect a debt from a local corporation owed to a foreign company, normally Taiwanese (although any foreign company would work - the time difference complicates communications). The law firm, believing it is exercising due diligence, confirms that the prospective client is a real company trading on the Taiwanese stock exchange and then enters into a fee agreement, thereby placing itself in the trap. It sends a demand letter, and a month later receives a cashier's check in full payment, made payable to the law firm. The client is pleased and directs the law firm to wire the money, after deducting its fees and costs. The law firm deposits the money in its client trust account, waits for the check to clear the local bank, and wires the money to the client. Things fall apart when the bank on which the check is drawn notifies everyone that the check is a counterfeit fraud - by which time it is too late to stop the wire transfer, and the law firm's client trust account is now out the proceeds, which the firm has to replace. The scam works because the law firm erroneously believes that the check is good when it clears the law firm's bank. That is not the case. The first clearance is only provisional. The bank on which the check is drawn has additional time under the law to verify the check.
In the case of the Michigan law firm, one of its members became suspicious when the payment check arrived. It had all occurred too easily, without litigation, and with full payment. He checked the name and telephone number of the Alabama attorney who referred the case, called him, and discovered someone posing as the attorney had made the referral.
Beware of similar circumstances. Remember, those engaged in these schemes are devious and will use the names of actual companies, client contacts, and referring attorneys in an effort to sell the scam. If you suspect you have encountered a similar situation, two steps that may be helpful are: a) independently verifying the names and contact information provided to you, making contact with appropriate persons to verify the representation; and b) not disbursing the deposited funds until the bank on which the cashier's check is drawn clears the check; in some cases it is possible that could take up to a week or more, but if you keep a copy of the check, you could call the bank on which it is drawn to see if they will advise you when it will be or was paid.
posted by:
Norma
Detroit
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  • That's pretty sophisticated... a far cry from the "You've won the U.K. Lottery!" e-mails and the "I am a widow from Nigeria.." scams.

    One other thing I recall you can do is to forward the e-mail to the FBI. They have a division that deals with scam e-mails. Since this particular one involved, what sounds to me, a mild form of identity theft (the posing as an actual attorney), I think the FBI would be interested.

    If you still have the e-mail, check out the fbi.gov website for the e-mail address to report the scam to.
  • I got the same e-mail, Norma. I'd like to think that no lawyer would fall for it but that's probably not the case.

    In any event, I don't have to worry about these out of state collection scams, because a representative of the Nigerian government contacted recently and thanks to him I'm expecting a lot of money to come my way real soon now. Any day...
    • A variation of this has been floating around for 10 years and it is sad that some folks get suckered in. A good rule of thumb is NEVER accept any out of country check. It takes your bank a month to clear foreign checks; thats right a full month to find out if it is legit. By that time you have sent off money.

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