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February 1, 2010
Con men just keep getting more brazen

Florida lawyers continue to be targeted by Internet e-mail scammers who are trying to lure attorneys with the offer of good fees for what on the surface appears to be easy work collecting corporate debts or divorce settlements.

Lili Quintiliani, an assistant ethics counsel, said the Bar’s Ethics Hotline continues to get several calls from lawyers who are unfamiliar with the scams. So far, the Bar hasn’t gotten any reports of lawyers who have been successfully scammed. But in a couple cases, she said lawyers didn’t realize they were being duped until they took a check to the bank and were informed it was fake.

In other cases, lawyers called the hotline with a trust accounting question on handling a check they had received, and Bar staff told them it was a scam.

Quintiliani said there seems to be a trend away from the business collection type of scheme and more into collaborative family law where the “client” is seeking help collecting a fictional divorce settlement. In these cases, the scammer pretends to be a divorced spouse — usually a woman — who is owed a substantial settlement, typically well into six figures, and wants the attorney to help collect it.

The attorney writes a letter and a check quickly arrives. The “client” asks the lawyer to deposit the check in the attorney’s trust account and forward the balance after deducting a fee. The catch, of course, is the check eventually bounces. For some lawyers in other states, that has happened after they sent the proceeds to the scammer with the result their trust accounts were out of balance by six figures.

While banks advised lawyers presenting the fraudulent check to contact authorities about the scam, lawyers have asked the Bar if attorney-client rules might prevent that.

Quintiliani has blunt advice in those situations: “If a person perpetrated a fraud on the attorney in order to form an attorney-client relationship, then there is no attorney-client relationship.”

The divorce scam is a variation of the business debt collection scheme that has been around for a bit longer. In that scenario, a business or an individual pretending to be an officer of a business contacts a lawyer to collect a debt, which is usually done after writing a letter. In some cases, the “debtor” sends a check to the lawyer even before a letter is sent. The creditor then asks the lawyer to forward the proceeds after taking out a fee, but again the check is bogus and the scammer is counting on the lawyer sending the money before the bank rejects the check. Many of those cases involve contacts ostensibly from China or the Far East, Quintiliani said. She said she has also heard of an estate scam. Overall, she said the Ethics Hotline is averaging around an inquiry a day from lawyers being targeted.

It’s not just Florida. Quintiliani said bars around the country have been warning their members of the dangers of the e-mail schemes. The Oklahoma Bar Association put on a seminar for its members on e-mail scams in December.

She said there are several things lawyers can do to protect themselves. One is to do a Google search on the name of the e-mail sender, or key phrases from the e-mail, since scammers usually send out thousands of e-mails using the same assumed name. Quintiliani said there are now Internet sites set up to track such scams aimed at lawyers, and the search will likely link up to such a site if the scam e-mail is listed there. She noted one fraud scheme appropriated the name of a well-known Japanese sumo wrestler (without his knowledge).

Lawyers, if they have the know-how, can also search the origin of the e-mail’s I.P. (Internet protocol) address. Some e-mails supposedly sent from Japan or China actually originated in Nigeria or other countries, Quintiliani said.

Another is to check sites that are now dedicated to tracking those scams or proving some examples of scam e-mails. She listed three:

http://scamoftheday.com/wordpress/2009/10/11/divorce-settlement-collaborative-law-agreement/

http://lawyerscam.blogspot.com/

http://www.scamwarners.com/forum/viewtopic.php?f=9&t=5327&start=0

Quintiliani also said lawyers can consult a memo the Oklahoma Bankers Association sent out to that state’s lawyers that gives good advice about dealing with e-mail fraud schemes. The advice includes: Be wary of anyone doing business at a distance and who is reluctant to talk on the phone or uses a TDD device (for the hearing impaired) for such conversations.

Also, be alert if the client continually pushes for a quick disbursement of the funds; they’re trying to get your money before their check is returned as a fake.

If you don’t have personal experience with the client, ask your bank to determine the validity of the check when you present it; don’t simply deposit it, because the bank has no way of knowing there may be a problem and likely won’t know until it is returned. That probably will be well after funds have been disbursed to the scammer.

The full text of that memo can be found at: http://www.okbar.org/files/fraud-alert-memo.pdf.

[Revised: 11-27-2014]