Article Reasonably Suspicious: Avoiding Targeted Email Scams, 0818 UTBJ, Vol. 31, No. 4. 37

Author:Nicholas Bernard, J.
Position::Vol. 31 4 Pg. 37

Article Reasonably Suspicious: Avoiding Targeted Email Scams

Vol. 31 No. 4 Pg. 37

Utah Bar Journal

August, 2018

July, 2018

Nicholas Bernard, J.

An email arrives in your inbox from a potential client in another country. It’s not a company you have ever heard of, but that’s not unusual – you have a strong web presence and you are reasonably well known. The potential client asks whether you would be willing to act as an intermediary in the sale of some heavy machinery. You agree, and the client tells you to be on the lookout for a cashier’s check from the buyer’s broker. Lo and behold, a couple of days later, the broker sends you that check, and the bank teller says that it’s valid. Good news – you have a new client, and the client can pay!

Your new client then requests that you transfer the buyer’s funds, minus your fees, from your account to the client’s foreign bank account to complete the sale. You make the requested transfer, and everything seems fine. Unfortunately, not long afterward, you get a phone call from the bank. The cashier’s check wasn’t good after all, and you never got the money you thought you had. Even worse, to cover the shortfall from the wire transfer, the bank has cleaned out your accounts – including your trust account, containing other clients’ funds – and you still owe the bank tens of thousands of dollars. Your frantic attempts to contact your client are unsuccessful, and the beneficiary of the wire transfer refuses to return the funds. Instead of making a little easy money, you have lost all the funds you had and more, and you now face potential legal consequences and disciplinary action because of the client funds that were drained from your account.

Email scams, especially those targeting professionals like attorneys, are more sophisticated than in years past. Gone are the days when scammers relied solely on numbers and gullibility, hoping that one out of every few thousand people would believe that a wealthy Nigerian prince needed their help. Scammers have learned how to develop specific targets and how to give their cons an appearance of authenticity that will hold up at least long enough to extract some cash from the victim. Once that’s done, the identity they used disappears, and the money with it. It’s rare for scammers to be caught and prosecuted, and the combination of low risk and potentially high reward – the scenario above is based on a real case in which the victim lost well over $100,000 – means that these sorts of rackets are unlikely to stop anytime soon.

According to the American Bar Association, the mechanics of the case above are fairly typical, but the facts vary. In many cases, the “client” purports to be a foreign corporation seeking the attorney’s assistance in collecting from an American debtor. When the lawyer agrees to help, the client contacts them again with the news that the debtor paid up after hearing that the client hired an attorney. At that point, the lawyer receives an apparently legitimate cashier’s check purporting to be a settlement payment. The client requests an immediate wire payment of the settlement funds, minus fees; the lawyer transfers the funds but soon discovers that the cashier’s check was fraudulent and the “client” is in the wind, leaving the attorney on the hook. Ethics Alert: Internet Scams Targeting Attorneys, American Bar Association Committee on Professional Responsibility and Conduct, 1–2 (Jan. 2011), available at administrative/professional_responsibility/6_combined_ session_documents.authcheckdam.pdf...

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