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Dear NYSBA members:
Your Law Practice Management Committee
has received reports from a number of credible sources about a potential
e-mail scam targeting lawyers, particularly solo and small law firms
engaged in general, commercial or collection practices. The way it
works is this:
An overseas
company – primarily from various parts of Asia, but any
locale in a significantly different time zone – e-mails
a law firm, saying that they have a mid-six figure debt that they need
collected (or judgment enforced). The attorney checks out the
company, using its e-mail address, and learns that it appears to come
from a recognized, established, publicly-traded Asian (or whatever
nationality) company. The attorney continues to communicate with the
client by e-mail, enters into an engagement letter, obtains the
documents supporting the debt (or judgment) and begins to work on the
matter. The attorney makes contact with the debtor, who eventually
agrees to pay/settle the sum due. As part of the satisfaction, the
debtor provides the attorney with a bank check. The attorney
deposits the bank check, deducts his/her fee and arranges for a wire to
the overseas client. The bank wires the funds before the bank
check clears. The bank check turns out to be forged. The bank then
reverses the charges back to the attorney, and, in all of the cases
reported to us, freezes the attorney's account (including the escrow
accounts).
The LPM Committee urges all lawyers to
exercise due diligence in handling matters initiated by overseas parties
not known by the attorney. We have all received messages from
individuals in foreign countries who need the help of an American to
move funds out of a foreign bank after the government there has frozen
assets of a deceased relative or political opponent. Now it seems, the
story has metamorphosed into debt collection and the targeted victims,
lawyers. Although the allure of new business can be enticing in these
economic times, the need to remain vigilant to possible fraudulent
practices does not diminish. All lawyers should ensure that their
client selection processes avoid situations like these, which have
already caused significant problems for lawyers in this state and across
the country.
Gary Munneke,
Chair, Law Practice Management Committee
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