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| home | join | contact | cle | sections | calendar | search | updated: October 2, 2008 | |
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| Boston Bar Association | |
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FRAUD SCAM TARGETING LAW FIRMS There has been an increase in the number of reported frauds being perpetrated on law firms during the past several months. Of particular interest is the fact that the perpetrators have usually targeted larger law firms that maintain offices internationally or are seeking to expand globally. Although each fraud has unique characteristics, there appear to be some common elements worth noting. The frauds are undertaken initially by an overseas company contacting an attorney and retaining him/her and the firm as a settlement agent to collect a debt or enforce a judgment. As a new client, a deposited check, normally in the form of a large-dollar cashier’s check, is presented and deposited into the firm’s account as a retainer. After the law firm’s bank has made provisional credit available, but before the counterfeit check is identified as such and is returned, the firm is asked to send one or more settlement wires to foreign beneficiaries, typically in Asia. By the time the law firm is notified that the check was fraudulent, the wired funds have reached their destination and cannot be reversed, leaving the firm with an overdraft for which it is responsible and the perpetrators have absconded with the firm’s funds. Several steps can be undertaken by law firms to minimize the possibility of falling victim to such scams. Among them are:
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