Please Deposit My Bogus Cheque So I Can Give the Money to an Orphanage

I continue to get daily emails and phone calls from Ontario lawyers that are finding themselves the targets of attempted frauds. The fraud attempts I am seeing are definitely getting more polished and sophisticated. In this post I want to highlight some of the changes in tactics the fraudsters are using so lawyers can better recognize the red flags of a problem deal.

A good example comes from call I got early last week from an Ontario lawyer that was in the middle of dealing with a matter that was clearly an attempt to dupe him with a bad cheque.

The lawyer was initially contacted by phone (not email) by a woman who wanted to retain him for help with collecting support from her ex-husband. For the initial identification she provided (a scanned copy by email) an Illinois driver’s license that looked legit. Things were otherwise looking normal at this point, although there was no apparent connection with Ontario. This made the lawyer hesitate and he asked for further identification so as to verify the identity and location of the woman. At this point the story changed a fair bit. The woman indicated she was actually on assignment in Japan and, you guessed it, her ex-husband was willing to make an immediate payment.

At the time the story changed, there was still no apparent rationale for the ex-husband to be making a payment through an Ontario lawyer’s office. This prompted the lawyer to ask some more pointed questions in calls with the woman to get some more background. The woman always had a quick and somewhat reasonable answer to the lawyer’s questions, but all the answers fell short of being entirely satisfactory.

Next, without any warning or indication it was coming, the lawyer received by registered mail (in an envelope that had a hand-written addresses on it) an uncertified cheque for $198,280. It appeared to be from an insurance brokerage and was written on a Brampton branch of BMO. The cheque looked totally legit to the lawyer. The head teller at the lawyer’s bank (not BMO) told him that the cheque appeared to be fine. The lawyer then called the insurance brokerage named on the cheque and a cross-check of the cheque number confirmed that it was a real cheque that had been issued to someone else for $280.00.

The woman called just after the lawyer got the cheque (Good timing!!) and told him to take his fees from the cheque after it had been deposited. The woman now asked that the remaining funds be wired to an account in China. Her reason was simple – she indicated that she had already pledged the funds to a charity there.

At this point the lawyer advised the woman he would not be acting on the matter as it was clearly a fraud and that he was returning the cheque to the real issuer. This did not deter her. The woman called back again and pushed hard for the lawyer to cash the cheque – and the explanation got more urgent – please pay up as I have pledged money to an orphanage and they need it to finish some building they are doing. Unbelievable!

There are several lessons to be learned from this and the other similar fraud attempts I am seeing:

• Initial contacts from the fraudster may not be via an impersonal and badly worded email. In this case it was by phone (and we have seen attempted and successful frauds where the fraudster came to the lawyers office multiple times). And the emails are getting better too. Some of the initial contact emails provide background that establishes a connection to Ontario.
• Carefully check and cross-verify client identification, especially if there are any questions as to where the client is or if there is not apparent connection to your jurisdiction
• Carefully gather relevant background facts and information, especially if the information provided by the fraudster is incomplete or inconsistent
• Carefully look at the labelling and sender’s address on the package or envelope that the cheque was delivered in. Handwritten addresses are common and it often appears that the packages were sent from a location that has no connection to the people involved in the matter.
• Carefully inspect the cheque or bank draft. Take it to your bank to see if they can verify it. If you think you are dealing with an inexperience teller ask for a more senior person to look at it (I really wish banks would be more willing to help verify cheques). Call the branch which holds the account the cheque was written on (and don’t use the phone number or address on the cheque (they will put you in touch with the fraudster) – get it from the bank or financial institution’s website). Call the payor named on the cheque to see if it actually made the payment (and get contact info from an independent source – not off the cheque), especially if the payor doesn’t look connected to the matter (from the example above, a insurance brokerage making a spousal support arrears payment).

The bottom line: If things don’t add up – ask more questions and don’t let the client bully you into making a payment on matter that is a real or apparent fraud.

From articles like these it is clear that thousands of lawyers are being targeted: Bad-Check Schemes Targeting Lawyers Are Increasingly Sophisticated and How to avoid becoming a fraud victim. Take precautions and don’t be one of the unlucky ones that are fooled.

Use the free fraud prevention resources on the practicePRO Fraud Page (www.practicepro.ca/fraud) to help the lawyers and staff in your firm avoid being duped. In particular, these resources will help you and your staff avoid being duped:

Download our Fraud Fact Sheet and give it to the lawyers and staff in your office. It lists the common types of bad cheque and real estate frauds and the red flags that will help you spot a fraudulent matter.

Listen to the archived LAWPRO webinar presentation on what frauds look like and how to avoid them. Access the MP3 (audio) file and the program PowerPoint and materials.

Cross posted on Avoid A Claim