Banking Law

Law firm fell victim to phishing scam, precipitating $336K overseas wire transfer, bank suit alleges

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A North Carolina bank claims in a lawsuit that it isn’t responsible for a $336,600 wire transfer to Russia from a law firm account.

The suit by Charlotte-based Park Sterling Bank claims the law firm of Wallace & Pittman fell victim to a phishing scam that began with a click on a link in a fraudulent email, the Charlotte Observer reports. The email claimed to be from an industry group and warned that a banking transaction had failed to clear.

Because of the clicked link, hackers were able to track a user’s keystrokes and learn banking passwords used by Wallace & Pittman, the suit says. Hackers used the passwords to send $336,600 to a “Konstantin Pomogalove” in Moscow, according to legal documents cited by the newspaper.

After receiving notice of the transaction, the law firm immediately sought to stop the transfer. Nevertheless, the call was too late, the story says. Park Sterling Bank initially refunded the money then told the law firm it wanted the funds returned. Before the bank could debit the amount, the law firm obtained a restraining order and closed its account.

Park Sterling Bank says the law firm should have opted for a higher security level that requires two approvals for wire transfers, and says the law firm is responsible for the loss under its customer agreement. Wallace & Pittman, on the other hand, claims the international nature of the wire transfer should have raised the bank’s suspicions, and the institution should have warned of phishing scams.

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