Minnesota Law Firm Milavetz Gallop Files Suit Blaming Wells Fargo for Loss in Nigerian Scam
Posted Apr 11, 2012 01:45 pm CDT
Updated: Milavetz, Gallop & Milavetz of Edina, Minn., claims in a lawsuit that Wells Fargo Bank is responsible for its loss of nearly $400,000 in a scam targeting law firms.
Milavetz Gallop fell victim to the scam when someone claiming to be a 40-year-old Korean woman hurt in Minnesota told the firm she needed help securing a 400,000 legal settlement, report the Minneapolis Star Tribune and Courthouse News Service. The firm received a settlement check for the amount, received assurances it had cleared, and forwarded $396,500 to a Hong Kong bank for the client.
The suit (PDF) claims Wells Fargo employees knew or should have known the check was fraudulent. The complaint alleges the bank had a conflict of interest because of a federal program that could have paid up to $150,000 to employees who provide information about money laundering.
The firm maintains the bank had plenty of warning from federal authorities that a Nigerian fraud ring was targeting U.S. lawyers, the Star Tribune notes. Still, despite precautions requested by the firm, the bank is alleged to have ignored red flags.
According to the suit, the scam is responsible for $29 million in losses from more than 70 lawyers and law firms. Scammers also tried without success to take another $100 million from about 300 lawyers and firms. Typically, the scammers contact lawyers through websites such as lawyers.com, the suit says.
Wells Fargo has issued a statement saying the suit has no merit and it expects to prevail.
Last updated Saturday to fix a link to the suit and to add more detail.