Fake Check Scams Continue to Target Lawyers
By Rick DeBruhl
May 28, 2013
So how does the scam work? Federal law says that when customers cash a check the funds must be made available, in most cases, within five business days. You deposit the check today, and the money appears in your balance tomorrow. However, that doesn't mean the check has cleared. That process can take weeks. Scammers count on the time between when the funds are "available" and the check has "cleared".
Sound familiar? Let’s hope not.
Protecting yourself is easy. First, be cautious of any unsolicited checks or emails from new clients who claim to be working on a large settlement. Before returning any funds, verify with the bank that the check has actually cleared. Remember, it's not enough to see the amount show up in your balance. Don't assume that because a week or two has gone by that the check must be good. The scammers are good at what they do.
Lawyers need to be especially cautious to avoiding becoming their next victim.
Warning by the FBI
U.S. Law Firms Continue to be the Target of Counterfeit Check Scheme
03/12/12—The IC3 continues to receive reports of counterfeit check schemes targeting U.S. law firms. The scammers contact lawyers via e-mail, claiming to be overseas and requesting legal representation in collecting a debt from third parties located in the U.S. The law firms receive a retainer agreement and a check payable to the law firm. The firms are instructed to deposit the check, take out retainer fees, and wire the remaining funds to banks in China, Korea, Ireland, or Canada. After the funds are wired overseas, the checks are determined to be counterfeit.
In a slight variation of the scheme’s execution, the victim law firm receives an e-mail from what appears to be an attorney located in another state requesting assistance for a client. The client needs aid in collecting a debt from a company located in the victim law firm’s state. In some cases, the name of the referring attorney and the debtor company used in the e-mail were verified as legitimate entities and were being used as part of the scheme. The law firm receives a signed retainer agreement and a check made payable to the law firm from the alleged debtor. The client instructs the law firm to deposit the check and to wire the funds, minus all fees, to an overseas bank account. The law firm discovers after the funds are wired that the check is counterfeit.
Law firms should use caution when engaging in transactions with parties who are handling their business solely via e-mail, particularly those parties claiming to reside overseas. Attorneys who agree to represent a client in circumstances similar to those described above should consider incorporating a provision into their retainer agreement that allows the attorney to hold funds received from a debtor for a sufficient period of time to verify the validity of the check.
If you have been a victim of an internet scam or have received an e-mail that you believe was an attempted scam, please file a complaint at www.IC3.gov
Inform yourself with these helpful links:
Fake Check Scam Hitting Lawyers
Lawyers’ Identities Being Used for Fake Websites and Solicitations
Accused ringleader in scam that bilked $70M from law firms has taken plea
Lawyers Scammed? Now There's a Switch
Top 10 Signs of a Lawyer Email Scam
Lawyer Email Scams - How the Nigerian Scam is Used on Lawyers
Lawyers Warned to Be Wary of Client E-Mail Scams
Scam The Lawyers
E-Mail Scams and Lawyer Trust Accounts
Despite Warnings, Lawyers Still Fall for Collection Scam