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Commercial debt collection scam using the name Ian Mason

August 27, 2014 By: FraudInfo Category: Confirmed frauds

Two Ontario firms notified us that they received an email from the purported Ian Mason looking to looking to retain them with regards to a commercial debt collection.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the debtor (who is part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and to see other names associated with it. Our Fraud Fact Sheet lists the red flags of a bogus legal matter that is really a fraud.

Here is the initial contact email sent by the fraudster to the lawyer:

From: Mr. Ian Mason [mailto:joybee207@aol.com]
Sent: August-27-14 6:08 AM
To:
Subject: Your assistance is Needed

Dear Counsel,

My firm needs your assistance for a debt collection in your county.
Please get back to me at: ian.mason@3mail.ie for details to enable you do your conflict check.

Mr. Ian Mason

How to handle a real or suspected fraud Read the rest of this entry →

LAWPRO defends lawyers: Lawyer owed no duty of care to non-client intermediary that paid out funds against client’s forged instrument

August 26, 2014 By: TimLemieux Category: Errors and omissions coverage

LAWPRO defends a wide variety of cases in any given year. In almost 80 per cent of the claims files we handle, there is ultimately no finding of negligence against the lawyer that was the subject of a claim.

Occasionally, our work on a lawyer’s behalf is made easier by having compelling facts on our side. But even where the facts are more balanced, LAWPRO counsel strive to put forward rigorous and well supported defences on the part of our insured − not only to avoid a loss in any particular case, but also in the interest of creating precedents and standards of care that are fair to all lawyers. Here is one of the cases we successfully defended in 2013:

Lawyer owed no duty of care to non-client intermediary that paid out funds against client’s forged instrument

A lawyer represented a client, who turned out to be an impostor, in obtaining a mortgage.

After receiving the mortgage proceeds, the impostor client used them to purchase a bank draft. He forged an endorsement on the draft, and presented it to the claimant intermediary (a “payday loan” – type company). The intermediary paid the impostor cash on the note.

The forgery was discovered, and the issuing bank reversed the payment. The intermediary’s account was debited. The intermediary sued the impostor’s lawyer (among others). The court held that the lawyer, who acted for the mortgage lender and the purported mortgagor, owed no duty to the intermediary.

Justice Stinson rejected the intermediary’s contention that a lawyer in a mortgage transaction owes a duty of care to parties who subsequently negotiate a cheque or bank draft purchased with the proceeds of the mortgage to ensure that the transaction was legitimate and that the cheque or bank draft was valid and negotiable. Because the client’s endorsement was forged, and therefore entirely ineffective to convey title to the bank draft, the intermediary converted it. The courts have so far refused to import negligence considerations into the strict liability regime governing the conversion of bills of exchange.

This article was originally published in the “2013 Annual Review” issue of LAWPRO Magazine. All past issues of LAWPRO Magazine can be found at www.lawpro.ca/magazinearchives

Separation agreement scam using the name Paula Chue

August 26, 2014 By: FraudInfo Category: Confirmed frauds

Two Ontario firms notified us that they received an email from the purported Paula Chue looking to retain them with regards to a collecting overdue payments resulting from a separation agreement.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the debtor (who is part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and to see other names associated with it. Our Fraud Fact Sheet lists the red flags of a bogus legal matter that is really a fraud.

Here is the initial email sent by the fraudster to the lawyer:

From: “Ms. Paula Chue”
Sent 8/21/2014 11:43:37 PM
To:
Subject: **SPAM** *Seeking assistance with my divorce separation/property settlement

Good day,

I am urgently seeking a legal assistance with my divorce separation/property agreement, I would appreciate your prompt response if this services can be provided by your firm.

Thank you,

Ms. Paula Chue

Replying to the email brought this response:

I thank you for your prompt response to my inquiry. I tried calling a couple of times but to no avail, and with the time difference(+13hrs EST) it is a little bit difficult to gauge the best time to reach you vice verse.

It is however worthy to note that I am currently in Japan with our children. My ex husband Jimmy Hitoshi and I were divorced in Japan but he has since relocated to Canada. he is a citizen.

The legal description of my case involved both of us agreeing under a Property and Settlement agreement incorporated, merged into and made part of the final judgement of dissolution of marriage for a settlement of child support, spousal/partner support, and medical support of $1,530,050.00, of which $580,430.00 has been remitted by him leaving a balance of $949,620.00 to be paid. This is the reason why I need your firm as there is already an agreement in place. I know for sure my ex husband has the financial means to pay for balance he owes me. If your firm is retained, my expectation of your services for now will be within the scenario of a Demand Letter to my ex husband Jimmy. It is my believe that this approach will trigger the much needed response from him towards amicable settlement with him to pay the balance due for sure this time.

If it becomes necessary your firm can request that the attached Divorce Decree be registered in Canada for enforcement. The Separation Agreement would also be registered as it contains the current balances due.

Please find attached to this email are the scanned copy of the Property settlement agreement, and the Court’s Decree for your perusal and I will be pleased to provide further information on this case on request.

I do expect this to be resolved amicably and in a timely manner. If you can to take up this case, kindly send me a copy of your retainer agreement and if the terms are acceptable I will sign so we can commence the process without delay.

Thank you for your anticipated cooperation and professionalism.

How to handle a real or suspected fraud Read the rest of this entry →

Commercial debt collection scam using the names Gareth Richardon and Tec Electric Motors

August 25, 2014 By: FraudInfo Category: Confirmed frauds

A California firm notified us that they received an email from the purported Gareth Richardon of Tec Electric Motors retain them with regards to a commercial debt collection.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the debtor (who is part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and to see other names associated with it. Our Fraud Fact Sheet lists the red flags of a bogus legal matter that is really a fraud.

Here is the initial contact email sent by the fraudster to the lawyer:

From: Gareth Richardson [mailto:gareth.richardson007@gmail.com]
Sent: Thursday, August 21, 2014 6:31 AM
To:
Subject: Attention Counsel

Our company is soliciting for legal assistance (Attorney) to handle a breach of contract case,either through negotiation or litigation.

Yours Sincerely,
Gareth Richardson
Sales Director
Tec Electric Motors Ltd
www.tecmotors.co.uk

How to handle a real or suspected fraud Read the rest of this entry →

Business loan collection scam using the name Morgan Phillips

August 25, 2014 By: TimLemieux Category: Confirmed frauds

Two Ontario lawyers notified us that they received an email from the purported Morgan Phillips looking to retain them with regards to a breach of a business loan agreement.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the debtor (who is part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and other names associated with it , and our Fraud Fact Sheet for a list the red flags of a bogus legal matter that is really a fraud.

Here is the initial contact email sent by the fraudster to the lawyer’s intake site, and subsequent reply:

From: Morgan Phillips [mailto:morganphillips033@gmail.com]
Sent: August-21-14 10:29 PM
Subject: [SPAM] Hello

Dear Counsel,

I was wondering if your firm would be able to assist me on a litigation case, regarding a friend who has defaulted in paying back the money I loaned her?

Best Regards,

Morgan Phillips

How to handle a real or suspected fraud Read the rest of this entry →

Resolutions to avoid doing things that annoy clients the most

August 22, 2014 By: TimLemieux Category: Law Practice Management

annoy
Clients will, understandably, get upset if they are treated badly or confronted with surprises. Make sure you appreciate how your words, actions, or inactions can annoy or even distress your clients. Here are some resolutions you can make to avoid doing the most common things lawyers do that annoy clients:

  • I will promptly return phone calls: Unacknowledged or unreturned phone calls are some of the most common complaints about lawyers. To avoid these problems, set and control client expectations at the very start of the relationship. Establish a reasonable policy on how quickly calls will be returned (e.g., within 24 hours, by the end of the next business day, or whatever is appropriate for your area of law or clients). Inform the client of the policy, and abide by it. Set up a mechanism for staff to return calls within the established timeframe if you are not available.
  • I will promptly reply to e-mails: In like fashion, emails that go unanswered are also a common client complaint. Some clients expect virtually instant answers to e-mail messages. Control this expectation by setting a policy on email communications (e.g. how and whento communicate by email, how long replies will take, alternative contacts and alternatives to email).
  • I won’t make clients wait in reception: Do you remember how you felt the last time you were made to wait for an appointment when you had arrived on time? Don’t make your clients feel the same way. Get off the phone or stop whatever else you are doing if a client is waiting for a scheduled appointment.
  • I will deliver on promises of performance: When it comes to deadlines, you can guarantee a happy client if you under-promise and over-deliver. Be realistic and don’t make promises to deliver if you cannot keep those promises. Be realistic in your assessment of what you can accomplish and by when. In like vein, be careful not to promise an unlikely or impossible outcome or resolution on a matter. Extra caution is warranted here as clients will hear what they want to hear when it comes to a promised outcome. To protect yourself, clearly document your advice to clients on what the expected outcome will be.
  • I will be prepared for client meetings: Don’t kid yourself – clients can instantly tell when you are not prepared. Shuffling through papers, using the wrong names or facts, and other similar clues make clients think to themselves that they may have the wrong lawyer. Make sure you are properly prepared for client meetings.
  • I will keep my clients informed and will communicate with them during long periods of inactivity: Clients always want to feel their matter is moving toward a resolution. But in litigation and other areas of law there can be long periods of inactivity as a matter of course. Keep them informed of the status of a matter and when they can expect it to move forward. Send copies of all incoming and outgoing correspondence to the client.
  • I will not send large bills without warning or explanation: This scenario calls for an in-person meeting to explain the charges to the client. Better yet, avoid it altogether with a strict retainer policy.
  • I will apologize if I fall down on the level of service my clients deserve: If you fail to do any of the forgoing things or otherwise come below an acceptable level of client service, acknowledge it to them, sincerely apologize, and make sure it doesn’t happen again.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

LAWPRO defends lawyers: “Lawyer not liable for transaction client completed after lawyer’s retainer ended’

August 21, 2014 By: TimLemieux Category: Errors and omissions coverage

LAWPRO defends a wide variety of cases in any given year. In almost 80 per cent of the claims files we handle, there is ultimately no finding of negligence against the lawyer that was the subject of a claim.

Occasionally, our work on a lawyer’s behalf is made easier by having compelling facts on our side. But even where the facts are more balanced, LAWPRO counsel strive to put forward rigorous and well supported defences on the part of our insured − not only to avoid a loss in any particular case, but also in the interest of creating precedents and standards of care that are fair to all lawyers. Here is one of the cases we successfully defended in 2013:

Lawyer not liable for transaction client completed after lawyer’s retainer ended

A lawyer acted for a client with respect to an attempt to sell a property held by a joint venture in which the client was a participant. The sale attempt was unsuccessful; in its wake, the lawyer closed his file.

Unbeknownst to the lawyer, the client entered into a new sale agreement with another party several months later. The lawyer received a telephone call from another lawyer, who simply asked the original lawyer about proper service of notice of sale under the joint venture agreement. The original lawyer gave the requested information. He heard nothing more.

Eventually, the client was sued for failing to properly complete that transaction. He third-partied his original lawyer. Wilton-Siegel, J. summarily dismissed the client’s third party claim against his first lawyer on the basis that there was no retainer and no basis for finding a duty of care.

The court rejected an expert opinion to the contrary. Wilton-Siegel, J. accepted that the telephone call did not constitute a retainer to advise about the new sale agreement. None of the indicia of a solicitor-client relationship were present. No one told the original lawyer that he was retained in respect of the new transaction. The original lawyer did not provide legal advice regarding the sale agreement, nor was he asked to do so. He was not given a copy of the agreement. He did not send either an account or a reporting letter, nor was he asked to do so.

The fact that the original lawyer had acted for the client in the past did not create a solicitor-client relationship in respect of all future dealings with the property. The reality of practice is that clients choose different lawyers for different transactions, even involving the same property.

LAWPRO Magazine practice tip: Steer clear of real estate claims by asking these five questions on every deal

August 20, 2014 By: TimLemieux Category: Real estate

RE questions

The real estate lawyer’s job is more than just conveying title, and not every matter will be straightforward. Communication errors and inadequate investigation are the biggest causes of real estate claims at LAWPRO, respectively 41 per cent and 26 per cent of claims reported between 2001 and 2011. Busy, high-volume practices often lead to situations where the lawyer is not taking the time to communicate with the clients properly.

Lawyers need to take the time to speak to clients to ensure they’ve gathered all the relevant information.

Here are five questions lawyers should be asking their clients or themselves on a real estate matter:

  1. Is there a spousal interest in the property? Although only one person may be registered on title, there could be a spousal interest in a matrimonial home. LAWPRO has seen a number of claims where the lawyer did not get the consent of the spouse to change the ownership status or encumber the property with a mortgage. Take the time to discuss the client’s marital status to determine whether the consent of a spouse – or any other person with an unregistered interest.
  2. Even with title insurance, are there more inquiries I should be making? Even if a title insurer waives certain searches or a survey requirement, lawyers still need to ask clients if they want the searches or survey done, and explain what the consequences could be of not doing so. The title insurance policy may rectify a problem to some extent or indemnify the client, but going through the process of dealing with the problem may still not be a situation the client welcomes. Think of a boundary dispute which leads to a hostile relationship with the neighbours, a deck needing to be torn down without the possibility of replacement or grow-op damage that could be harmful to the family’s health: All things that searches might have uncovered depending on the circumstances. The lawyer should also look beyond the searches that are required by the title insurer and apply his or her own knowledge of the particulars of the transaction to determine which searches ought to be considered. For example, is it a property on a ravine that may be under the jurisdiction of a Conservation Authority?
  3. What is the future use of the property? Often the lawyer fails to ask clients about possible future uses of the property that the client might have in mind, and as a result fails to get a title insurance endorsement that would protect the clients (e.g., they planned to build a pool, but later discovered an easement prevents it). In the alternative, the lawyer must personally investigate the feasibility of the plans (and presumably bill accordingly) or document with the clients that they did not wish to undertake the expense of investigating their options at this time and therefore no assurances are being provided beyond the existing legal state of the property.
  4. Is the person obtaining the mortgage actually the person who will be living in the house? Shelter fraud, unlike other mortgage fraud, involves real people who want real places to live. In this scenario, people who don’t qualify for a mortgage enlist the help of a “friend” or family member. For a payment, the “friend” becomes the borrower and takes title to the property and presents himself to the lawyer as the purchaser of the home. In effect he’s selling his good credit. Of course he has no intention of living there, and the person(s) who hired him will move in and promise to make the mortgage payments. If the person(s) behind the scheme default on the mortgage, the “friend” is on the hook, pursued by the bank and facing financial ruin. The friend may sue the lawyer claiming that he was not aware of what he was getting himself into, and that the lawyer knew (or should have known) that he was buying on behalf of others and should have made him aware of the consequences of defaulting on the mortgage. While there is only so much lawyers can do to ensure the borrower is in fact the person planning to live in the house, a good intake process can ensure that the client’s answers to relevant questions are documented. After all, most real estate lawyers will also wish to know if there will be a tenant in the house instead of the owner, as residential rental investment properties bring many other legal issues of their own.
  5. What information should I pass on to the lender? Lawyers need to remember that lending institutions are also their clients in many real estate transactions. We’ve seen claims in which lawyers have failed to communicate material information to the lender client so the lender can make an informed decision on whether to advance mortgage funds. Throughout the course of the transaction, lawyers should always consider whether information received from any party, a title search, or other due diligence may be considered information material to the lender’s decision to advance funds under the mortgage or is expressly requested in the lender’s instructions. This includes, for example, information that may suggest that the property is being purchased at an inflated price. As well, information that suggests that the purchaser is misrepresenting the true circumstances of the purchase (as in the shelter fraud described above) should be reported to the lender before the lawyer proceeds to close the transaction and advance funds under the mortgage. In such circumstances lawyers must be careful to fulfill their duties to each client, as required by the Rules of Professional Conduct, and in particular Rules 2.02(5) and 2.04(6.1)
  6. This article originally appeared in the September 2013 issue of LAWPRO Magazine. All past issues of LAWPRO Magazine can be found at www.lawpro.ca/magazinearchives

LawPRO Magazine archives: When preparing wills, don’t dispense with formalities – execution matters

August 19, 2014 By: TimLemieux Category: Wills/Estates

The following article by Nora Rock (corporate writer and policy analyist at LAWPRO) appears in the October 31 edition of the LAWPRO Webzine, which focused on wills and estates matters.

Will-drafting is an area of legal practice that demands extremely careful attention to detail. Decisions in this area make it clear that even where a will is well-drafted and is consistent with the testator’s known intentions, failure to have the will executed in accordance with the applicable legal formalities will render it invalid.

When that happens, the lawyer responsible for arranging and supervising the execution of the will may be liable in negligence to disappointed beneficiaries.

This consequence was recently confirmed by the Supreme Court of Newfoundland and Labrador in Rowsell v. MacKinnon, wherein Rowsell, a disappointed would-be beneficiary, was awarded damages against an accountant and his employer firm.

The testator in the case had made a series of wills, including in 1998, 2004 and 2005. In the 1998 will, he left his entire estate to his wife, with a gift over to his children. His wife passed away in 2003, and around the same time, the testator, who was in his eighties, became seriously ill. During his illness, he was cared for by a Mrs. Rowsell and her husband. The testator and Mrs. Rowsell had met fifty years previously when she, then three years old, fell off a dock into the sea and he rescued and revived her.

In 2004, in recognition of the care provided to him when he was sick, the testator requested that his accountant change his will to include a bequest of $100,000 to Mrs. Rowsell. The accountant made the change, and the same bequest was included in a third will made in 2005.

Unfortunately, when supervising the execution of both the 2004 and 2005 wills, the accountant arranged for the attendance of only one witness (a clerk from the accounting firm). Because the Wills Act of Newfoundland and Labrador in effect at the time required that two witnesses witness and sign the will at the time of execution, both the 2004 and the 2005 wills were invalid and could not be admitted for probate, making the 1998 will – with no bequest to Mrs. Rowsell − operative. Read the rest of this entry →

Separation agreement scam using the name Rivka Esther Pollack

August 19, 2014 By: FraudInfo Category: Confirmed frauds

An Ontario firm notified us that they received an email from the purported Rivka Esther Pollack looking to retain them with regards to a collecting overdue payments resulting from a separation agreement.

This is a classic bad cheque scam that presents as legal matter requiring the assistance of a lawyer. In this scam lawyers will be duped into wiring real funds from their trust accounts after depositing a fake cheque received as payment from the debtor (who is part of the fraud). See our Confirmed Fraud Page for more of an explanation of how these frauds work and to see other names associated with it. Our Fraud Fact Sheet lists the red flags of a bogus legal matter that is really a fraud.

Here is the initial email sent by the fraudster to the lawyer:

From: Rivka Esther Pollak
Date: Mon, Aug 18, 2014 at 8:55 AM
Subject: I NEED A LAWYER
To:

Hello,

My name is Rivka Esther Pollak. I am contacting your firm in regards to a divorce settlement with my ex husband (Antonio F. Pollak) who resides in North America. I am currently on assignment to Poland. We had an out of court agreement (Collaborative Law Agreement) for him to pay $848,900.00 plus legal fees. He has only paid me $64,000.
I hereby seeking your firm to assist 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.

Sincerely,

Rivka Esther Pollak

How to handle a real or suspected fraud Read the rest of this entry →