US Atty Carmen Ortiz Warns About Attorney Collections Scam

Friday, April 02, 2010

US Attorney Carmen Ortiz has issued the following alert regarding an Attorney Collections Scam: 

"It has come to my attention that several law firms in Massachusetts and elsewhere in the United States have been victimized by various sophisticated attorney collections scams. In the interest of preventing the further victimization of lawyers and law firms in Massachusetts, I am writing to request that organizations [BBA, MBA and WBA] notify their members regarding the potential for fraud in connection with collections cases.

While the details of the scams vary, there are several common elements. Generally, a lawyer or law firm is contacted via email by a potential client from another country seeking assistance with a debt collection matter or real estate transaction for which the client must retain a local attorney. Often the scam emails appear to come from legitimate American attorneys on behalf of the foreign client, and generally both the client and debtor use the names of real companies or individuals.

Shortly after the law firm is retained, either the purported client or the purported debtor will notify the attorney that all or part of the debt is undisputed and that the debtor will repay some or all of the debt directly to the law firm. Shortly thereafter, the law firm receives a check – which in fact is counterfeit. The counterfeit checks, which in most cases appear to be cashiers' or other official checks, look legitimate to the naked eye and in some instances even financial institutions have failed to identify the checks as counterfeit. A verification phone number printed on the counterfeit checks leads back to the fraudsters; in many cases victim law firms have used that phone number to "verify" the counterfeit checks. After the law firm deposits the check, the purported client instructs the lawyer to wire the funds, less the attorney's fee, to the client. Commonly, the checks "clear" initial processing through the law firm's banks and are only discovered to be counterfeit when they are rejected by the institution on which they are drawn. By the time the law firm and financial institutions realize that the checks are counterfeit, the law firm has already wired funds to the putative client and those sums are unrecoverable.

Contact Assistant United State Attorney Kristina E. Barclay at (617) 748-3371 should you have any questions."