"AvoidAClaim" Blog

This is the text of an email alert LAWPRO sent June 29, 2011, warning lawyers of recent fraud activity and to be extra vigilant for fraud as the Canada Day long weekend approaches.

Fraudsters are busier than ever and they have lawyers in their crosshairs: At LAWPRO we’re getting many calls and emails daily from lawyers targeted by fraudsters attempting bad cheque or real estate matter frauds. Don’t let your guard down.

Be extra vigilant as we approach the Canada Day weekend! From experience we know that fraudsters are more active just before long weekends and holidays.

Read this Alert for more information on the types of frauds LAWPRO is seeing, the red flags of fraud, and what to do if you suspect you’re being targeted or have been duped.

Bad cheque frauds

This is the most common attempted fraud we are seeing. At their simplest, these bad cheque frauds all work the same way. The fraudsters retain a lawyer to act on an otherwise legitimate-looking legal matter. That matter creates circumstances to dupe the lawyer into quickly disbursing funds on a bad cheque or bank draft that was deposited into a trust account. The fraudster gets real money and the lawyer is left with a trust account shortfall.

LAWPRO most commonly sees bad cheque frauds on the following types of legal matters (in all these cases the person making the payment is the fraudster or someone that is in cahoots with the fraudster):

• A payment from an ex-spouse on a spousal support collection, often further to the terms of a collaborative family law agreement (currently the most common);
• A payment from the debtor on a business debt collection (currently the second most common);
• A settlement on a work-related personal injury claim;
• A loan advance from a sham lender on a business loan or inventory purchase loan; and
• A bad cheque given by the purchaser as a deposit on a real estate deal that ends up being aborted, triggering a request to pay the deposit back to the purchaser or a third party.

Real estate matter frauds

Although not as frequent as a few years ago, real estate frauds may be making a comeback: LAWPRO has seen two attempted real estate frauds in the last week. Both appear to be scams that were intended to grab mortgage proceeds from an unsuspecting lawyer acting for a purchaser. In one case the lawyer acting for the vendor was someone impersonating another Ontario lawyer. In the other case, the purported lawyer was not a member of the Law Society. One way to avoid being duped if you don’t know the lawyer acting on the other side of a real estate matter is to crosscheck the lawyer’s name, address and phone number information in the documents given to you with the information that appears in the Law Society’s member database.

Keep your guard up

Some of the fraud attempts are very obvious: Poor spelling, bad grammar and/or completely untenable fact circumstances (e.g., multi-million dollar lottery wins or inheritances) should sound alarm bells.

However, some frauds are extremely sophisticated and look like completely legitimate legal matters. Both new and experienced lawyers have been temporarily fooled into working through file opening and initial stages of the matter before they recognized or determined they were the target of a fraud. Don’t be complacent. The fraudsters go to great lengths to create scenarios that otherwise appear to be legitimate legal matters. They are prepared to engage in extensive and ongoing communications over weeks and even months, usually by email, but also by phone, and on occasion, even in person. Unfortunately some lawyers are being duped by these frauds.

Red flags of a fraud scam

For a listing of the common red flags that indicate a matter is a fraud scam see this AvoidAClaim blog post.

Some resources

practicePRO’s AvoidAClaim blog: Posts on the AvoidACLaim.com blog have details on the different types of frauds and examples of real back and forth communications between lawyers and fraudsters. You’ll also find images of the fake supporting documentation the fraudsters are supplying, including identification, bad cheques and bank drafts, and fabricated collaborative family law agreements and divorce decrees. A list of confirmed frauds and the names the fraudsters are using> is available as well.

For more immediate updates on fraud and claims prevention, subscribe to the email or RSS feed updates from LAWPRO’s AvoidAClaim blog.

Fraud Fact SheetMore fraud prevention information and resources are available on the practicePRO Fraud page, including the Fraud Fact Sheet, a handy reference for lawyers and law firm staff that describes the common frauds and the red flags that can help identify them.

FAQs on LAWPRO enhanced fraud coverage

On LAWPRO’s website you’ll find answers to common questions about the enhanced protection provided lawyers regarding counterfeit certified cheques and bank drafts.

How to handle a real or suspected fraud

If you have been targeted by any of these frauds, please forward any of the emails and supporting documents that you have received to fraudinfo@lawpro.ca.

If you suspect you are acting on a matter that might be a fraud, call LAWPRO at 1-800-410-1013 (416-598-5899). We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. If the matter you are acting on turns out to be a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. Instructions on how to report a claim are here.

In the last two weeks LAWPRO has seen two attempted real estate frauds where the fraudsters were posing as the vendors’ lawyers. Both of these frauds appear to be scams that were intended to steal mortgage proceeds from the trust account of an unsuspecting purchaser’s lawyer.

In one case the individual acting for the vendor was someone impersonating a real lawyer from the Niagara area. In the other case, someone purportedly named Salamagha Yusif was allegedly acting for the vendor. No one by this name is a member of the Law Society.

If you don’t know the lawyer acting on the other side of a real estate matter, you can avoid being duped on this type of fraud by crosschecking the name, address and phone number information that appears in the Law Society’s member database with the contact information in the documents given to you by your client or the lawyer on the other side of the matter.

How to handle a real or suspected fraud

If you have been targeted by any of these frauds, please forward any of the emails and supporting documents that you have received to fraudinfo@lawpro.ca.

If you suspect you are acting on a matter that might be a fraud, call LAWPRO at 1-800-410-1013 (416-598-5899). We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. If the matter you are acting on turns out to be a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you.

Many email scams are obvious due to poor spelling, bad grammar and/or completely untenable fact circumstances (e.g., multi-million dollar lottery wins or inheritances). However, some of the email-based frauds LAWPRO is seeing are extremely sophisticated and look like completely legitimate legal matters. The more sophisticated frauds have temporarily fooled new and experienced lawyers into working through file opening and initial stages of the matter before they recognized or determined they were the target of a fraud. And don’t be complacent – lawyers are being successfully duped by these frauds.

The common red flags that can indicate a matter is a fraud include:

• Generically addressed emails (e.g., “Dear attorney” or “Attention counsel”);
• Generically addressed emails sent to undisclosed recipients. This indicates that the message was BCC’d to you and dozens or hundreds of other lawyers;
• Emails where the sender’s email address and the displayed name for that address are different;
• Emails that request a reply be sent to a person or email address that is different from the sender’s name or email address;
• Use of the word “attorney” in the subject line or body of the message (At least for Canadian lawyers);
• Emails that give a referral source that wouldn’t have your name (e.g., a website that does not list you or a bar association that you are not a member of);
• Individuals using a personal email account from AOL, MSN, GMail or similar free email service who contact you to do work on behalf of a major corporation or business. Why aren’t they using a corporate email address? Note that they may use the name of a real person who does actually work for that corporation – crosscheck name and contact info on websites or by phone;
• Clients who insist that email is the only way to communicate due to time zone differences;
• Clients who renege or delay on a promised payment of a retainer. When the bad cheque payment from the ex-spouse or loan advance arrives they will ask you to take payment from it;
• Clients who, without question or hesitation, are willing to pay hourly rates, flat fees or contingency fees that are far higher than normal;
• Clients who insist on or who are not worried about shortcuts being taken;
• One or more delays in the promised payment or advance of funds. This is usually an attempt to create a sense of urgency to quickly disburse the funds when they finally do arrive;
• Debtors who seem over-anxious or who unexpectedly pay outstanding debts;
• The cheque or bank draft arrives from an address that doesn’t make sense, is in an envelope with a handwritten address and/or is without a covering letter;
• The payment or loan advance is not in the form you expected or requested (i.e., it is not a bank draft or it is not certified) and/or it is for an amount that is different than expected;
• The payor on the cheque or bank draft you receive doesn’t make sense given the type of payment (e.g., a payment of spousal support arrears by a cheque from corporation, charity or travel agency);
• Unexpected changed circumstances that give rise to reasons the client wants to wire funds off-shore to third party on urgent basis for reason not related to the legal matter you are handling (e.g., to pay medical expenses or buy furniture);

Check for the red flags listed above if you have any suspicions that the matter you are handling is a fraud. While there can be good explanations for some matters to have one or two of the above red flags, you should be extra cautious and careful on any matter that has any of the above red flags. Question your client if things don’t add up or don’t make sense – even the smallest things. Make sure the answers to any questions you ask satisfactorily address any concerns that you have. Lastly, if you aren’t 100 per cent comfortable that a transaction or matter you are handling is legitimate, terminate the retainer. Don’t let the persistent demands of an insistent client push you into something you are uncomfortable doing, no matter how sad or urgent the story is.

In Webb v. Birkett, 2011 ABCA 13, the Alberta Court of Appeal held that the defendant solicitor Birkett was negligent in representing the plaintiff Webb in a collaborative family law settlement.

The Alberta Court of Appeal held that CFL practitioners must meet the same standard of care required of other family law practitioners — including taking appropriate steps to get the financial information needed to properly advise the client. A lawyer must obtain sufficient reliable information to be able to ascertain what the client would likely receive, or be required to pay, for spousal support, child support and matrimonial property division should the matter be resolved at trial, and so advise the client. A lawyer should tell a client who takes the position that he or she wants to settle without having received full information from the other side that they may therefore be accepting less, or paying more, than what would be required according to law, and provide to that client an assessment of the impact f the risk, including estimates of the value of what might be lost, or paid above what was necessary, to the extent possible, on the basis of the information then available. A prudent solicitor would put this advice in writing.

While it comes from the Alberta court of appeal, the comments on the required standard of care in the CFL setting make this decision worthwhile reading for collaborative family law lawyers in other Canadian jurisdictions. The decision also dealt with limitation periods and proving damages (despite the lawyer’s negligence, the court took a very tough stance on proving damages and held none were proven in this case).

Between May and July more than 75 lawyers in Ontario and elsewhere (in the US in Alabama, California, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, Utah, Wisconsin, Wyoming; and elsewhere in the world from Australia, Jordan and the Marshall Islands) have reported receiving emails similar to the one below from the purported Elizabeth Nakamura.

These are similar to past divorce and collaborative family law fraud attempts we have seen from such names as Peggy Higashi, Beverly Kawashima, and Rita Takahashi. For a full list of names associated with this type of fraud see Avoid a Claim’s Confirmed Frauds page.

An example of the nearly identical messages appears below, along with examples of the documentation provided. Different email addresses are used, including:

• elizanakamura@iprimus.com.au
• lizynakamura@iprimus.com.au
• elizabethnak@iprimus.com.au
• elizabethnakamura@btinternet.com
• nakamuelizabeth@iprimus.com.au
• nakamurlizabeth@iprimus.com.au
• izbeth@iprimus.com.au

Dear Counsel,
My name is Elizabeth Nakamura. I am contacting your firm in regards to
enforcement/collection or possible litigation of divorce settlement with
my ex husband Collins Nakamura who resides in your jurisdiction. If you are
in the position to represent me at the moment kindly advise immediately.
Your’s truly,
Elizabeth Nakamura

Nakamura Collaborative Agreement

Nakamura divorce filing

Nakamura Settlement Agreement

If you have been targeted by this fraud, please forward any of the emails you have received to fraudinfo@lawpro.ca.

For more immediate updates on fraud and claims prevention, subscribe to the email or RSS feed updates from LAWPRO’s AvoidAClaim blog.

If you are a LAWPRO insured, please call LAWPRO at 1-800-410-1013 (416-598-5899) if you suspect you are acting on a matter that appears like it might be a fraud. We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. In the event the matter you are acting is a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. Instructions on how to report a claim are here.

Further fraud prevention information and resources are available on the practicePRO Fraud page (www.practicepro.ca/fraud), including the Fraud Fact Sheet, a handy reference for lawyers and law firm staff that describes the common frauds and the red flags that can help identify them.

Keeping up with the changes to Facebook Privacy settings is a never-ending task. The large number of settings makes it very confusing. The LifeHacker blog comes to the rescue with The Always Up-to-Date Guide to Managing Your Facebook Privacy.

This comprehensive guide runs through the basic privacy settings that determine what you share, next it looks at deeper settings you’ll want to tweak, and it finishes with a few third-party tools that will help keep your Facebook information private.

LifeHacker says they will update this page when there are changes in the future. Bookmark this page, make it a favorite and tell your friends about it (remember they can share your information too). This is an amazing must read resource for all Facebook users and you will want to come back again.

CBC is reporting that Facebook was hacked again. While it doesn’t look like huge numbers of accounts were compromised, it is worth changing your password to protect yourself.

And regardless of whether your account was compromised or not, changing your passwords regularly is one of the best things you can do to protect your online identities and accounts. You can learn about other password best practices in this article from Law Practice magazine.

Today an Ontario lawyer reported to LAWPRO that he received the message reproduced below from someone purporting to be Adam Tudore or Gregory Sean Knight. Note that the From: email address is the first name and the addressor address in the body of the message is the second name.

This is the first time we have seen this scam and these names used. A search of the web confirmed it is a scam.

Also interesting is the fact that there were 414 email addresses listed in the To: field, including dozens that belong to Ontario lawyers.

The message received was as follows:

From: Adam Tudore [mailto:adam_tudore@hotmail.com ]
To: [414 email addresses]
Sent: June 16, 2011 4:47 AM
Subject: REPLY FAST

REPLY TO; adam_tudore@yahoo.com

If you have been targeted by this fraud, please forward any of the emails you have received to fraudinfo@lawpro.ca.

For more immediate updates on fraud and claims prevention, subscribe to the email or RSS feed updates from LAWPRO’s AvoidAClaim blog.

If you are a LAWPRO insured, please call LAWPRO at 1-800-410-1013 (416-598-5899) if you suspect you are acting on a matter that appears like it might be a fraud. We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. In the event the matter you are acting is a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. Instructions on how to report a claim are here.

Further fraud prevention information and resources are available on the practicePRO Fraud page (www.practicepro.ca/fraud), including the Fraud Fact Sheet, a handy reference for lawyers and law firm staff that describes the common frauds and the red flags that can help identify them.

In the last week three Ontario lawyers reported to LAWPRO that they received the message reproduced below from someone purporting to be Sullivan Terry.

This is the first time we have seen the name Terry Sullivan used on this fraud (one message used Sullivan L. Terry); although we have seen essentially the same scam and message in the past by Karen Clark, Michael Park and Gary Triestman.

Here is a copy of the message received, as well as the cheque and covering letter sent by the “employer” to one lawyer who had had some correspondence with this fraudster.

Subject: Dear Counsel
Date: Wed, 15 Jun 2011 18:47:12 +0300
From: Sullivan L.Terry
Reply-To: sllvantery@gmail.com

Regards,
Sullivan L.Terry

If you have been targeted by this fraud, please forward any of the emails you have received to fraudinfo@lawpro.ca.

For more immediate updates on fraud and claims prevention, subscribe to the email or RSS feed updates from LAWPRO’s AvoidAClaim blog.

If you are a LAWPRO insured, please call LAWPRO at 1-800-410-1013 (416-598-5899) if you suspect you are acting on a matter that appears like it might be a fraud. We will talk you through the common fraud scenarios we are seeing and help you spot red flags that may indicate you are being duped. This will help you ask appropriate questions of your client to determine if the matter is legitimate or not. In the event the matter you are acting is a fraud and there is a potential claim, we will work with you to prevent the fraud and minimize potential claims costs.

If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. Instructions on how to report a claim are here.

Further fraud prevention information and resources are available on the practicePRO Fraud page (www.practicepro.ca/fraud), including the Fraud Fact Sheet, a handy reference for lawyers and law firm staff that describes the common frauds and the red flags that can help identify them.

This article by Domenic Bellacicco, Unit Director and Counsel, appears in the new Summer 2011 issue of LAWPRO Magazine. It is a follow-up to an earlier article on administrative dismissals by Domenic Bellacicco that appeared in the July 2009 issue of LAWPRO Magazine.

You have just settled a very complicated case on the eve of trial. The preparation leading to trial has left little time to work on other files, but fortunately the two weeks previously blocked off have now opened up. Time to catch up and start returning all those old phone calls and responding to those never ending emails.

You start reading an email from defence counsel on one of your personal injury files who has let you know that the Registrar dismissed your client’s action for delay about six months ago and he is closing his file.

He reminds you that you did not answer his previous letters asking you to move the action along and deliver the pre-accident clinical notes and records of your client’s treating doctors. When you review the file, you find underneath a copy of the police report, a status notice from the court warning of the pending dismissal, but you do not recall ever seeing it before.

Your first reaction is panic, but you then remember that this did happen to you before, and you recall having read an article in the July 2009 LAWPRO Magazine on this very issue. That article stressed that these dismissal orders need to be taken seriously and you should call LAWPRO immediately and ask for help.

You recall that the claims counsel at LAWPRO helped you write the appropriate letter to your client, and vetted your draft motion materials, which were later served on opposing counsel. Fortunately, the action was restored on consent, but you knew that LAWPRO would retain counsel on your behalf should the matter proceed to cross examinations and then be argued on a contested basis.
(more…)