Legal Research

Amazing Conversations Between a Fraudster and a Lawyer

By Dan Pinnington

Yesterday LAWPRO posted an update and warning to Ontario lawyers about the ongoing bad cheque frauds it is seeing. LAWPRO continues to get daily calls and emails from lawyers that are being targeted by fraudsters attempting bad cheque frauds. Lawyers must not let their guard down.

If you have any doubt about the extent to which fraudsters are willing to work to engage lawyers and dupe them, take a look at the back-and-forth email exchanges on the Melissa Andersen and Siam Rai fraud attempts. You will be totally amazed at the level of detail in the information exchanged and the extent to which the fraudsters pushed the matter along (and avoided paying a retainer) despite pointed questions from the lawyers.

At their simplest, these bad cheque frauds all work the same way. The fraudsters retain you to act on an otherwise legitimate-looking legal matter that creates circumstances to dupe you into quickly disbursing funds on a bad cheque or bank draft that you deposited into your trust account. The fraudster gets real money and you are left with a shortfall in your trust account. Note how the fraudsters deftly manipulated circumstances through the course of the exchanges to achieve this end.

Lawyers should not be complacent. These frauds are getting ever more sophisticated. The fact scenarios will look like legitimate matters and the documentation and counterfeit cheques the fraudster will provide you will look real. Spousal support, general collections, loan transactions and real estate matters can all be used as the front for one of these frauds.

Special caution is warranted as we approach the holidays. In the past, fraudsters have been more active in the days just before long weekends and other holidays. Presumably this is to take advantage of circumstances when lawyers and law firm staff will be busy or more distracted with other things.

Most importantly, never be in a rush to disburse funds from your trust account ? no matter how hard the client pushes. Certified cheques and bank drafts can be pulled back days or even weeks later. The only way (in Canada) to irrevocably get funds into your trust account is by a wire via the LVTS or Large Value Transaction System. (See the Show me the Money article from LAWPRO Magazine for more on funds transfers.)

Read LAWPRO?s update and warning to make sure you understand the different types of legal matters that the fraudsters are using for these frauds and can recognize the red flags of a bad cheque scam.

Full post as published by Slaw.ca on December 14, 2010 (boomark / email).