Law Practice Management

FBI Warns Law Firms: Beware of E-Mail Clients (and Counterfeit 'Settlement' Checks)


After earlier reports that law firms had been scammed out of millions of dollars in counterfeit check schemes often involving e-mail clients, the FBI has issued a warning that those in the Dallas area, at least, are being targeted by several new versions of the fraud.

In one, an individual claiming to be the president of a fictitious company in Denmark sent an e-mail seeking an unidentified Dallas law firm’s help in collecting a debt allegedly owed by a Houston company. The client signed an engagement letter, agreed to a retainer amount and provided falsified documentation of the claimed debt, reports the Dallas Morning News’ Crime Blog.

But before the law firm could gear up for a litigation battle, the client’s purported secretary sent an e-mail saying that the Houston company had agreed to pay a $492,510 settlement to avoid suit. A check soon arrived in the mail, which the law firm deposited. After deducting the agreed $20,000 fee, it wired the balance overseas to the client. By the time the firm found out that the settlement check was fraudulent, the wired money was gone, the newspaper recounts.

One red flag that wasn’t spotted until too late: While the claimed debtor was in Houston, the “settlement” check was mailed to the firm from Canada.

In another version of the scam, the FBI says, a purported ex-wife working in Asia seeks a law firm’s help collecting a settlement from her husband, a United States resident. He has a counterfeit “certified” check delivered to the firm. Once again, if the scheme is successful, the firm wires the client the balance of the payment, after deducting its fee, before discovering that the check is a fake.

Firms should be wary, the FBI warns, of clients who make contact only by e-mail, especially if they reside in foreign countries.

Related coverage:

ABAJournal.com: “As Hundreds of Law Firms Report E-Mail Scams, One Loses Bid for Insurance Coverage”

ABAJournal.com: “Bad-Check Schemes Targeting Lawyers Are ‘Increasingly Sophisticated’ “

ABAJournal.com: “Another Scam Targets Lawyers: Pay My Cab Fare and I’ll Return Your Package”

ABAJournal.com: “Zombie Servers Put Law Firm in Midst of Internet ‘Litigation’ Blitz”

Updated on June 3 to link to subsequent ABAJournal.com post.

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