Posted Mar 15, 2013 04:24 pm CDT
A foreign citizen accused of acting as a ringleader in a scheme in which prosecutors say U.S. and Canadian law firms were scammed out of some $70 million has pleaded guilty in federal court in Harrisburg, Pa.
Emmanuel Ekhator, 42, pleaded guilty earlier this year to conspiracy to commit mail fraud and wire fraud, admitting responsibility for up to $20 million in law firm losses, A resident of of Mississauga, Canada, and Benin City, Nigeria, who was seeking refugee status in Canada, he had been living in Toronto while coordinating the fraud ring, reports the Toronto Star.
The scheme involved a group of individuals who initially contacted law firms by email, routinely claiming to be foreign residents seeking representation to collect money owed them by a U.S. entity, often from a tort claim settlement, divorce or real estate transaction. After the firm agreed to the representation, the purported third party would then contact the firm and offer to send a cashier’s check in settlement of the claim. The firm would deposit the bank check in its trust account, wire the settlement proceeds to the foreign “client” and retain the agreed fee before discovering that the check was a fake, explains a press release from the U.S. Attorney’s Office for the Middle District of Pennsylvania.
Lawyers who have discussed being victimized in such schemes have said banks involved in cashing the check verified that it was good and cleared the funds, but later notified the firm that the check was a fake and sought reimbursement.
The press release says counterfeit checks “often included a telephone number for the financial institution. Lawyers attempting to determine the validity of the check would call the number only to reach another conspirator who would falsely verify the check.”
Barbara Nevin of Milavetz, Gallop & Milavetz confirmed that her Minneapolis area firm suffered such a loss in 2009 but declined to discuss the fraud in detail prior to Ekhator’s sentencing.
“It was a very sophisticated scam,” she told the Star, explaining “You have someone purporting to be a client and they have other people that are in this with them pretending to be insurance adjusters.”.
Ekhator faces up to 20 years when he is sentenced in June and he has agreed to forfeit property in Canada and bank accounts in Nigeria.
Additional and related coverage:
ABAJournal.com: “Nigeria Extradites Man Accused of Scamming Law Firms Out of $31M”
ABAJournal.com: “Law Firms Still Victimized in Fake-Check Web Scams; Trial Looms for Nigerian Accused in $32M Swindle”
ABAJournal.com: “Sued by bank, lawyer says he was also victimized by client’s $297K check scam”
ABAJournal.com: “Lawyer Who Says He Was Scammed Is Sued by Bank Re Fake $299K Cashier’s Check”
Which recent law grads earn the most?