Lawyers Beware! A Con Artist is Just a Phone Call or Email Away

by Scott Legal, P.C.
Contact

Everyone has either received, or knows someone who has received, an email from the relative of a deposed King (or Queen) of Nigeria where this royal relative is willing to pay you millions of dollars if you would only help them get their money out of Nigeria.   Although this scam is obvious to many, the perpetrators of this fraud have managed to defraud some out of either their personal information or their money.  As of late, I have become aware of a similar (although somewhat more sophisticated) scam and the targets of this scam are lawyers & law firms.

A week ago, I had the following discussion with one of my associates:

“I am not sure if we normally do this type of case but I thought that I would bring it to you and see.  A friend told me that a Nigerian oil company, ARC, was suing General Electric for some equipment that GE failed to deliver to them. They are looking for a law firm in NY to handle a $10,000,000 contract dispute and I was wondering if the firm would be interested.” 

This struck me as particularly interesting because a few weeks earlier I had a discussion with a fellow lawyer about a very similar fact pattern where Company A (the company that contacted the law firm) was suing Company B (a large well known multinational company) and the contract dispute was over the failure to build ships & deliver equipment.  What makes this scam incredible is that unlike the emails from the relative of the deposed King of Nigeria that are often riddled with spelling errors and obvious indications of fraud, Company A produced very authentic looking documentation to support that a contract actually existed.  (Purchase agreement, ship building specifications, etc.) The fraudsters also set up phony telephone numbers & email addresses and were able to conduct several phone conversations and exchange various emails with the law firm without initially raising suspicion.

Shortly after the law firm was retained, Company B “settled” and Company A told the law firm that the check was going to be sent to them.  A few days later an authentic looking check arrived but by that point the law firm was suspicious.  When the law firm called Company B directly it was discovered that Company B had not ever heard of Company A and no dispute ever existed.

The exact mechanics of this scam are unclear but subsequent research suggests that Company A sends the law firm an authentic looking check which they deposit in their trust account.  At almost the same time, the law firm would wire funds from their operating account to Company A and Company A would disappear with the money.  (Presumably before the false check is detected).  Other frauds involve elaborate money laundering schemes where Company A uses the law firm to launder large amounts of cash that they claim are a settlement from a dispute.  (Money launderers are willing to pay large amounts in fees to launder money).

There are two lessons that lawyers (and others) can learn from this.  The first is simple. If something looks to good to be true, it usually is neither good nor true.  Most scams are based on an overwhelming desire for the scammed party to benefit or “win” something and when someone is offering you easy money there is usually a reason.  The second lesson for lawyers is, know your clients.  In all of the lawyer fraud cases I have heard of, the appropriate due diligence either revealed or could have revealed that the law firm was dealing with a fictitious party.  The due diligence process should not stop and you should take a closer look at your clients if you start to receive suspicious information from the them during the attorney-client relationship.  These fraudsters thrive on the fact that many law firms are looking for business so lawyers beware!

Click here for PDF version.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Scott Legal, P.C. | Attorney Advertising

Written by:

Scott Legal, P.C.
Contact
more
less

Scott Legal, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!