After all these years, lawyers are still falling for Internet-based check scams.
Last year, federal prosecutors indicted six people in an Internet collections scam that conned 80 lawyers in four states out of more than $32 million and attempted to scam another 300 law firms out of $100 million. One of the perpetrators was eventually extradited to Nigeria this year.
Such scams have a long history. Early versions would involve letters or emails making simple claims such as, “I have a lot of money that I need to get out of my country. I need your help to do that. Send me a little money to pay fees, and I will send you a lot of money.” Now they are, as one victim lawyer put it, “very, very sophisticated.”
The usual reason a lawyer falls for the scam is that he or she ignores the warning signs that something is not quite right. Sometimes this is because times are tough and the promised fee is high. Whatever the reason, it’s imperative that lawyers be able to separate the real inquiries from the fake.
While there are an infinite number of variations on the basic theme, all involve three elements: a seemingly legitimate transaction, the arrival of a check, and a request to wire out funds. The following are some warning signs.
First, you receive an email or letter out of the blue requesting your legal services. Your first question should be, “How did they get my name and why did they select me from all of the other available lawyers?” If the message states that you were referred by another lawyer, contact that person directly using information available from your local bar directory. Never rely on contact information in the message. Also be aware that if you click on a link in the message (aside from malware possibilities), the sender will usually appear legitimate. After all, websites are easy to set up. Also look at the addressee line. Does it look like a mass distribution or is it directly to you at your normal business address?
Second, the text of the message is usually a little off. Sometimes you will be asked for “help in your jurisdiction.” (Don’t they know what jurisdiction you practice in?) The message will state that the prospective client has a claim against someone else. Sometimes, but not always, a prior settlement has been worked out and some payments have been made. The settlement and payments are usually round numbers, and no lawyer will have previously been involved. (One lawyer said that if the scammer could get a settlement that large without a lawyer, he or she didn’t need her help.) If you respond for additional information, you may get a more targeted, but still false, response. Generally, but not always, you will be told that the prospective client believes that if you will simply write a letter, the money will come straight away.
Third, the prospective client is located outside your jurisdiction—often out of the country—and you will find it almost impossible to speak directly with him or her. The prospective client will usually say that he or she is very busy, travelling, or working odd hours, so communication must be by email.
Fourth, at some point someone sends you a check. Never is payment wired to your account. The check may be in response to your demand letter, or it may even come before you have even written your demand. In some cases, the prospective client may have sent you a retainer to pay for services in advance. The check looks and feels like a real check, maybe even a cashier’s check. Usually, it purports to be issued at a remote location on a bank with no local branches. The catch is that almost immediately after the check arrives, the client requests that you return part of the funds to him—or to some entity on his behalf—by wire transfer. The client may just want the amount you “collected” less your agreed fees—which are usually very large for the work done—or the client may have overpaid your retainer and wants a refund of the overage.
Once the funds are wired, the lawyer has been had. Wired funds are almost impossible to recover. The wire is usually to an account in another country, and the funds are typically again wired to another institution out of reach as soon as they hit the designated bank.
The best way to protect yourself is to heed the warning signs and not accept the representation in the first place. Victims of these scams are always left to hope that the check is “good.” It never is.