ALERT-Fraudulent Internet Scam

Oct 25, 2015




A new variant of the familiar check fraud scam is making the rounds and Maryland solo and small firm lawyers are being targeted.

BACKGROUND.   Generally, the scammers pose as a prospective client; send the unwitting attorney what appears to be an authentic check payable in a large amount for deposit into the attorney’s account; offer the attorney an attractive “fee” for doing little if anything and request that the attorney disburse the balance to various payees, often by wire transfer.  The unsuspecting attorney who deposits and disburses on the bogus check before it inevitably “bounces” is left financially devastated and often in trouble with Bar Counsel when the deposit was made into the attorney’s trust account and other clients’ funds cover the disbursements.

CURRENT SCAM FACTS- CLIENT IN IRELAND.  The scammer contacts the attorney through email or their website posing as a client in Ireland.  They know the attorney’s name and practice areas and seek preparation of a “sale agreement” related to a transaction with a local party. The scammer requests a Fee quote and transmission of an Engagement Agreement.  The signed Engagement is returned as an email attachment and a Cashier’s or Official Check from a well-known U.S. Bank like CitiBank payable to the order of the attorney in excess of $400K is then delivered to the attorney with specific instructions to immediately deposit the check in escrow and withdraw the agreed Fee. The attorney then receives immediate and repeated email demands from the “client” for disbursement of the deposited “funds” to others, expressing increasing urgency and aggravation why disbursement has not occurred.  The attorney’s “diligence” is limited to a cursory inspection of the check and a Google search revealing that the parties to the underlying transaction actually exist and would logically do business with each other.

1. Be Suspicious.
3. Apply Common Sense.  Why would someone so far away choose you to trust with such a large sum of money?
4. When in Doubt – Stay Out.  As the saying goes, “Things that seem too good to be true generally are”.  Just hit “Delete” and don’t get involved.
5. Take Precautions.  Exercise reasonable diligence, especially when dealing for the first time with a prospective client over the Internet – verify who you are dealing with. Contact the local company in the transaction – chances are they are aware of the scam.  Inspect the check carefully – Does it “look right”?  Are the spellings correct?  Before depositing the check, meet with management at your branch – not just with the Teller.  Express your concerns to management and ask them to verify the check with the Drawee bank.  The Drawee bank’s security department can determine whether the check is authentic or fraudulent.  Document the meeting if management advises that the check is authentic as things could [and likely will] change for the worse later.  Your bank’s investigation of the check before deposit could save you from financial disaster later when the check bounces.
6. Don’t Disburse.  If you already deposited the check, do not disburse against those funds until the check has “cleared”, meaning the Drawee bank has “paid” the item.  Do not disburse earlier when your bank says the funds are “available.”  Under the UCC, Banks can extend “provisional credit” on a deposit and then reverse the funds out of your account later.
7. Resist the Pressure.  Inform the “client” that no funds will be disbursed unless and until
the funds have “cleared” your bank.  A fraudulent check will inevitably “bounce” – “Cashier’s
checks” included. This way, you will not suffer the financial and ethical consequences of disbursing funds on a deposited check that is later proven fraudulent; and
8. Report.  Report the scam to the White Collar Crimes section of the local FBI office or file a
complaint with the Internet Crime Complaint Center (a partnership between the FBI and the National White Collar Crime Center) [See Resources below for links].

It is generally recognized that no duty of confidentiality is owed to an internet scammer posing as a “client” solely for the purpose of perpetrating a crime in which the attorney is the victim.

MLRPC 1.6 (b) permits an attorney to “reveal information relating to representation of a
client to the extent the lawyer reasonably believes necessary:

(2) “to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services”; and

(3) “to prevent, mitigate, or rectify substantial injury to the financial interests or property of another than is reasonably certain to result or has resulted from the client’s commission of a crime or fraud in furtherance of which the client has used the lawyer’s services”.

Other Resources

1. “A New Twist on the old cashier’s check scam” by Mark D. Killian – Florida Bar Association
article – March 15th, 2011:!OpenDocument

2. “Increasingly Sophisticated Internet Scams Continue to Target Lawyers” by James M. McCauley, Esquire – Virginia State Bar article – December 2nd,  2013:

3. Federal Bureau of Investigation – Internet Crime Complaint Center:

4. Federal Bureau of Investigation – White Collar Crime Page:

5. Maryland Attorney General’s Office – Consumer Protection Division:

6. Maryland State Bar Association  E-Newsletter “Tech Talk” article – May 25th, 2015: