Scammers continue to target Virginia lawyers with promises of high fees for purported collections actions, followed by bogus cashier’s checks — and the scams are becoming increasingly sophisticated.
The Virginia State Bar warned about the scams in June and July 2009: http://www.vsb.org/site/news/item/e-scam-fraudulent-certified-checks/
A newer scam that nearly claimed a Virginia victim is an e-mail that requests help collecting a judgment from a collaborative law agreement for a divorce. The purported creditor is a wife who recently relocated to Japan, and the purported debtor is the husband. The client creditor may appear to be referred by an out-of-state lawyer. The husband quickly agrees to pay the judgment and sends a cashier’s check. The attorney targeted by the scam deposits the check in his or her escrow account, waits for it to be credited to the account, and then wires the funds minus his fees to the wife in Japan. As the check makes its way through the banking channels, it is found to be fraudulent. The lawyer is left owing his bank or other clients a significant amount of money. To make matters worse, some legal malpractice insurers take the position that client losses caused by these scams are not covered under their policy.
Danger Signs or Red Flags:
• The transaction moves very quickly, and you will be asked by the “client” to wire or expedite disbursement of funds from your trust account.
• A party to the transaction is in a foreign country.
• The deal is too good to be true (you don’t get paid big bucks for doing nothing).
Avoiding the Scam:
• Do not enter into a transaction unless you have verified the parties and the claims. Identify and know the “client” with whom you are dealing.
• If you enter into these transactions, do not disburse any funds in your trust account until you have verified the funds with the issuing bank and the check has finally cleared. It may take weeks for the bank to determine that the check is counterfeit.
• Instruct the debtor to make one check payable directly to the “client” for the exact amount owed and a second check payable to you for your fee. Instruct the debtor to have the checks drawn on a local or national bank with branches in your area. Cash your fee check at the issuing bank.
Reporting the Scam
If you have been scammed, call the VSB Ethics Hotline at (804) 775-0564 and your bank for advice. Lawyers who think they might be the target of a scam can also make a report to the Internet Crime Complaint Center at http://www.ic3.gov.