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Relieved Pa. Attorney Says He Dodged a Bullet in Alleged $32M Bad-Check Scam Targeting 80 Law Firms

Posted Dec 1, 2010 12:38 PM CDT
By Martha Neil

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A $32 million alleged bad-check scam reportedly victimized 80 attorneys in four states.

And the defendants in a federal wire-fraud case in the Middle District of Pennsylvania are accused of trying to bilk another 300 law firms out of $100 million more.

But a relieved Pennsylvania personal injury attorney says he dodged a bullet in the case because he delayed depositing into his law firm trust account a $400,000 check supposedly sent by an insurance company, reports the Legal Intelligencer in an article reprinted in New York Lawyer (reg. req.).

The situation at first seemed legitimate, says Gene Goldenziel of Needle Goldenziel Pascale & Consagra in Scranton:

A Pennsylvania resident with an Asian accent called to seek his help after losing her leg in an accident at a Pennsylvania-based trucking company. Its disability insurer was willing to write a check for the $400,000 policy limit, but insisted that the check had to be sent to her bank or her attorney, he recounts.

She gave Goldenziel a copy of the disability policy and the phone numbers for her employer and the insurance company. He called the employer, and everything checked out. However, when he called the insurer, the company said its check would have to be deposited into the law firm's escrow account so that the money could be sent to his client at a foreign location, minus the attorney's fee, the Legal Intelligencer reports.

Goldenziel then contacted his client, who had said she was originally from South Korea and was now back in her home country again. He asked her to go to the local American embassy, so he could verify her information. She balked, sending him an e-mail that implied she was angry because he didn't trust her.

"I was skeptical," Goldenziel tells the legal publication. "Meanwhile, a perfectly legitimate $400,000 check comes to my office, but I decided not to do anything with it. I was going to wait and think it out."

Although the check seemingly had been drawn on the account of a well-known insurance company, Goldenziel was soon contacted by an investigator who told him it was counterfeit.

Lawyers are especially vulnerable to such schemes, says Goldenziel, because it isn't unusual in this day and age not to meet a client face-to-face. Plus, notes a federal prosecutor in Philadelphia, law firms routinely put settlements into escrow and then divide the money up and issue law firm checks to those entitled to a portion of the total.

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