Fake Check Scams Are Targeting Law Practices Learn the Red Flags and Avoid the Traps
by Gloria J. Barr and Patricia Sallen
Originally published by the State Bar of Arizona. Reprinted with Permission.
Anyone with questions about or information on this scam may contact Stark Ligon at the Arkansas Supreme Court’s Office of Professional Conduct, 501-376-0313 or 1-800-506-6631, or the FBI at 501-221-9100 in Little Rock.
Out of the blue, you receive an email from the representative of a potential foreign client, maybe from China. He flatteringly tells you–in pretty decent English–that he is looking for a trustworthy attorney in Arizona to help his company with a collections issue. You–you!–are the trustworthy attorney he has found. Your charge: you would receive money from a debtor and then transfer it to the potential foreign client. You might even be paid with a percentage of the money. Sounds promising, right? Some easy money? And tempting, because who knows where this one job for an international client might lead? You send a fee agreement to the representative. He maybe sends the agreement back, signed, and tells you that it’s imperative that you wire the money as soon as possible after receiving it from the debtor. You promptly receive a check from the debtor and deposit it into your trust account. Being a diligent attorney, you confirm with your bank that the money has been credited to your account, and you wire it as directed. And then a few days later, your bank tells you that the check wasn’t legitimate. The bank has debited your trust account thousands of dollars. You already know about the email scams in which a Nigerian government official allegedly needs your help to move money out of the country. You’ve probably received those emails and immediately–and rightly–disregarded them because they look so bogus. This new wave of check scams just looks less bogus, more legitimate, and targets attor26
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neys. It has hit close to home, too. The State Bar is aware of several Arizona attorneys who have been approached by the scammers, and a few who have taken the bait. The checks that scammers send you, whether they are personal checks or cashier’s checks, look and feel real, and may even fool bank tellers. The checks may even be from a legitimate business or corporation, but may have been written fraudulently. In another variant of the scam, no checks are involved. Instead, money is transferred directly from another account to your trust account. The other account is often the account of someone who fell for another scam. Once again, when the scam is discovered your bank will cancel the deposit. You will lose your other client’s money and you could be charged with the crime of moneylaundering. The following is a compilation of information from the Comptroller of the Currency (http://www.occ.treas.gov.ftp/ bulletin/2007-2.html), National Fraud Information Center (http://www.fraud. org/tips/internet/fakecheck.htm), Internet Crime Complaint Center (http://www.ic3. gov/crimeschemes.aspx#item-3) and Federal Bureau of Investigation (http://www.fbi.gov/ majcases/fraud/fraudschemes.htm) about the scams, with additional information we’ve added specifically for attorneys. How these scams work These scams work well for three reasons: •The scammer appears to send you “real” money–usually a cashier’s check or certified check drawn on a U.S. bank (sometimes even a postal money order)– before asking you to wire or express-mail part or all of that
money to the scammer or a third party. The scam relies on your belief that real cashier’s and certified checks and postal money orders are more trustworthy than personal checks. However, the counterfeit checks or money orders that the scammers send are very good and tough to identify as fake. •The scam is initiated in response to a legitimate activity, such as offering legal services and legal representation. In the original versions of the Nigerian scam, the “offer” arrives unsolicited, in a letter, an email or a fax. •Once the scammer is in touch with you, he often will chat via email or phone, talking about the legal services he needs. He appears friendly, sincere and aboveboard. He works hard to win your trust, but appearing trustworthy is the con artist’s primary tool in getting you to act. Specific red flags to keep in mind You are asked to pay money out of your account. This is a five-star red flag. If you are asked to do this, run, don’t walk, away from the “deal.” The basic pattern of all the fake check scams is that the con artists will send you a “cashier’s” or “certified” check (or postal money order) to deposit into your account. Then they will give you a reason to quickly wire or express part or all of the money out of your account to them or to some third party they identify. Often the wired money is to go to a foreign country. You are asked to act very quickly. The scammers don’t want you to have time to verify whether the cashier’s check or certified check is authentic or counterfeit or to wait for the check to clear. The scammers typically ask you to wire cash as quickly as