Sophisticated New Fraud Targets Family Law Lawyers

Beware of a new family-law twist on the ubiquitous email-check fraud scam, where unwitting lawyers are defrauded into wiring their bank funds to anonymous con artists pursuant to phony divorce settlement payment scenarios. As reported on the Avoid-a-Claim blog of LawPRO, the Lawyers’ Professional Indemnity Company, Toronto, Ontario lawyer liability carrier, numerous lawyers report being targeted by emailers who, assuming a false identity, say they need a lawyer to help them collect payments owed under a collaborative family law agreement.  Typically the emailer claims to be an ex-wife owed money by the ex-husband under the agreement.   

When the lawyer takes the bait and agrees to the engagement, the “ex-husband” – actually the same scammer or scammers – sends the lawyer a “cashier’s check” for deposit into the lawyer’s account, with instructions to wire the collected funds to the ex-wife’s account.  By the time the lawyer discovers the cashier’s check was counterfeit, it’s too late  -- the unknown fraudfeasor is long gone with the wired funds from the lawyer’s account.

Following is an example of the scammer’s initial communication, as shown on the LawPRO  Avoid a Claim blog. 

Subject: Request for Legal Representation.

Body:
Attn: [lawyer’s first and last name]

Hi Counsel,

My name is [wife’s name]. I am a contacting your firm in regards to a divorce settlement with my ex husband [husband’s name] who resides in your jurisdiction. I am currently on assignment in [Hong Kong or Japan or China]. We had an out of court agreement (Collaborative Law Agreement) for him to pay [amounts ranging from $350,000-$900,000] plus legal fees. He has only paid me [amounts ranging from $30,000-$150,000] since then.
I am hereby seeking your firm to assist me in collecting the balance from him. He has agreed already to pay me the balance but it is my belief that a Law firm like yours is needed to help me collect payment from my ex-husband or litigate this matter if he fails to pay as promised.

Yours truly
Wife’s first and last name

The new family law agreement scam is more insidious than some previous iterations of the email-check fraud scam.  The grammar and composition of the fraudfeasor’s communications to the lawyer are reasonably sophisticated, and lawyers often receive a reasonably well-prepared agreement before receiving the check for deposits.

As with most such scams, lawyers are victimized by a lack of understanding that the fact that a bank reports that a deposited check has cleared and that funds are available, does not mean that the bank is assuming responsibility in the event that the deposited check proves to be a bad check.

The LawPRO Avoid a Claim Blog, authored by Dan Pinnington of LawPRO, suggests the following preventive measures and warning signs for lawyers who may receive such solicitations:

• Don’t be fooled by e-mails personally addressed to you: Some of the initial contact messages we have seen are personalized with the lawyer’s first and last names appearing at the start of the body of the message.
• Don’t be fooled by a follow-up to the initial contact message: Many lawyers who ignored the initial contact message received an email follow-up message asking if they received the initial contact message.
• Don’t let you guard down because it is a referral from another local lawyer: Other local lawyers that don’t practice family law may forward the initial contact message to lawyers they knew practiced family law.
• Don’t be fooled by a referral from a foreign lawyer: In two instances the initial email was drafted to appear that it was coming as a referral from a UK lawyer.
• Don’t be fooled by a British or European name: In earlier versions of this fraud the clients had an Asian name. In most of the more recent attempts the client has a British or European name.
• Don’t be fooled by legitimate looking identification: The fraudsters are providing identification without hesitation. We have seen color scans of the identification pages of a Chinese passport and US driver’s licenses from various states including Michigan, Illinois, and Alabama.
• Don’t be fooled by a “collaborative family law agreement”: We have seen seven different versions of the same collaborative agreement. Don’t be fooled by e-mails personally addressed to you: Some of the initial contact messages we have seen are personalized with the lawyer’s first and last names appearing at the start of the body of the message.
• Don’t be fooled by detailed background information: We have encouraged lawyers to ask for further background information when there are suspicions as to whether the matter is a fraud. This remains one of the best ways to determine if the matter is a legitimate one. However, the information provided by the client must be carefully reviewed for reasonableness and consistency as the replies to requests for further information are becoming more detailed and convincing. They now include information that ties the client to the local area.
• Don’t be fooled by phone calls that appear to be from local numbers: A few lawyers have received phone calls from these fraudsters which caller-ID indicated were local calls (i.e. from the same area code). Note that it is very easy to fake or “spoof” a local area code and phone number with calling cards or VOIP phones.
• Don’t be fooled by local addresses and phone numbers: In some cases the fraudsters are providing background details that have a local nature; for example, an address where the couple lived, local home or work address for ex-spouse.

Our thanks to Dan Pinnington, Director, practicePRO, Lawyers’ Professional Indemnity Company, Ontario, CA for permission to reprint excerpts from his blog http://avoidaclaim.com/