Bad-Check Schemes Targeting Lawyers Are 'Increasingly Sophisticated'
Bad-check schemes specifically targeting law firms are becoming more and more sophisticated, prompting calls for vigilance and caution in the bar.
Lately, family law firms appear to be the targets of scams which purport to involve the collection of outstanding spousal support and other divorce matters. Earlier this week, the FBI in Hawaii warned that two of six family law firms targeted in a cashier’s check scheme were swindled out of more than $500,000.
Toronto’s Dan Pinnington wrote on the law blog Slaw that he gets two to three calls and e-mails a day from lawyers who have been targeted to act on matters that are clearly frauds.
Pinnington says family law practitioners aren’t the only ones who need to be on guard. “We continue to see attempted frauds involving debt collections, and we also continue to see real estate frauds as well (more ID theft now, as flip frauds are harder in a slower market when property values are not rising),” writes Pinnington, who is director of practicePRO at the Lawyers’ Professional Indemnity Company.
Among the frauds Pinnington has seen in Ontario: three instances where fraudsters have forged checks written on law firm trust accounts. The presumption is that fraudsters believe the forged law firm checks will undergo less scrutiny than any other forged check. Fraudsters are lowering the amounts in spousal collection schemes to make them look more reasonable. Lawyers are also being approached by fraudsters who purport to come from trusted referral sources.
Pinnington offers several tips for lawyers to avoid being duped, including:
• Be familiar with common types of bad checks and frauds targeting lawyers; and educate staff to be on the lookout too.
• Be sure to properly identify and verify client information.
• Never be in a rush to disburse funds from a trust account, especially if the client is pushing.