The Florida Bar
www.floridabar.org
The Florida Bar News
click to print this page  click to e-mail the address for this page 
March 15, 2011
A new twist on the old cashier’s check scam

By Mark D. Killian
Managing Editor

Some of those looking to separate lawyers from their money through cashier’s check scams are rockin’ it old school.

Instead of mass e-mail phishing expeditions seeking lawyers to perform collections work, some scammers are now picking up the phone and cold calling their potential marks.

Cliff Shepard Cliff Shepard recently received such a call. A man using the name “George Graham” called the Maitland lawyer’s office saying he’d seen Shepard’s profile on avvo.com, the online lawyer rating service that allows attorneys to post information about their practices. Graham says he’s owed a debt here in Florida and asks Shepard to represent him in collecting it. Shepard agrees to take the case, sends him a fee agreement and retainer request. Graham immediately signs and returns the fee agreement via e-mail.

Within 24 hours — and before the retainer is received — Graham calls to say the debtor wants to avoid litigation and has agreed to start making payments immediately. Graham also wants the payments to be routed through the Shepard Smith and Cassady trust account.

“I said, ‘Ok,’” Shepard said. “Doesn’t happen every day, but it’s not out of the realm of possibility.”

A week or two later, a $295,000 Chase Manhattan cashier’s check arrives at the office. On the back of the check is a phone number for Chase Manhattan to confirm the authenticity of the check. Shepard calls the number and an automated answering service tells him that because of “high call volume,” a representative can’t take his call, but he should leave a message.

Now the red flags are going up.

“I know better than that for Chase Manhattan; they don’t do that,” said Shepard, adding that the automated voice on the other end of the line had an Asian accent and the recording contained a grammatical error: “If you are an Chase Manhattan customer.”

“So I got online and called the real Chase Manhattan Bank, went through two or three phone calls, and they verified the account number of the front of the check is a legitimate cashier’s checking account number — but from Texas, not Florida — but the cashier’s check number was completely illegitimate.”

Now fully on to the ruse, Shepard, who also happens to be the Maitland city attorney, calls his local police chief to get law enforcement involved and awaits contact from the crooks looking for their payday. When the inevitable e-mail arrives, Shepard replies that he knows the check is fraudulent and that he has turned the matter over to law enforcement.

“Surprisingly enough, I have not heard from him since I sent that back,” Shepard said. “I’m still utterly amazed that this stuff goes on. And yet, even though I didn’t fall for it, I can see how people who are not as keyed into what is going on could. The check looks like a real cashier’s check and this is [the type of case] law firms like mine do.”

Because Bar Rule 5-1.1(j), holds that cashier’s checks carry a “limited and acceptable risk of failure” and are allowed to be disbursed before they are “finally settled, and credited to the lawyer’s trust account,” Shepard said he can understand how a bookkeeper or lawyer may disburse money before it is determined a check is no good.

Words of advice?

“Never ever, ever, ever, ever, accept work from someone through the Internet until you have first made contact and have gotten actual cash money in your account,” Shepard said.

Shepard said the scam is “particularly vicious” because even if law enforcement tracks “Graham” down they will have to prove he knew the check was fraudulent, and he will just say the debtor sent the bad check.

“It’s pretty sophisticated,” Shepard said. “It had a lot of earmarks of a legitimate deal right up until the check came, and I said, ‘Wait a minute, now.’”

“I’m naturally suspicious, but others may not be so suspicious.”

[Revised: 09-30-2014]