In the past I’ve posted several articles on fraudsters targeting law firms (see e.g., Fraud Alert: Bad Cheque Scams, posted August 2009). It’s incredible how fast the methodology of fraud evolves.
Lately family law lawyers have been increasingly targeted by fraudsters, according to Dan Pinnington of LawPro, our insurance company for professional liabilities. In his posting “Keeping your guard up” at Slaw.ca, Pinnington pointed out that he has been getting 2-3 calls or emails almost on a daily basis from lawyers who have been targeted by fraudsters.
The latest victims include two law firms in Honolulu. They were approached by email on family law matters. The client paid the retainer by cashier’s cheque. The amount paid was greatly in excess of the firm’s standard rate. The client then contacted the firm and instructed it to wire the excess to an off-shore account.
Of course, the cheques turned out to be fakes, and the firms ended up with shortfalls in their accounts.*
Pinnington also provided a summary of emerging trends in this type of fraud fraud:
- Lesser amounts of money are involved, therefore the requests appear more reasonable.
- Fraudsters contact the firm through sources that appear trustworthy. For example, they may ask for referrals from professionals, such as real estate agents, and then state that they have been referred by these individuals known to the firm.
- Fraudsters attempt to withdraw money from the law firm’s accounts by forged cheque, created either from scratch or from cheque stock.
The bottom line: be vigilant. Be aware of known bad cheque schemes and their indicators. Educate yourself and your staff so you don’t become a fraudster’s prey.
*ABA Journal, online: www.abajournal.com/news/article/honolulu_law_firms_swindled_out_of_500k_in_e-mail_scam
The cashier’s check turned out to be a fake. Unfortunately, it wasn’t discovered until the funds have been transferred according to the client’s instruction.
