Our primary goal when we started posting bad cheque fraud warnings was the protection of LAWPRO-insured lawyers, most of whom reside in Ontario. An unexpected result has been the huge response from lawyers outside Ontario.
Of the nearly 2,300 emails we’ve received from targeted lawyers since January 2011, almost half have come from outside Ontario. We have had reports of fraud attempts from every province and territory in Canada and almost every U.S. state. In addition, we have had reports from more than twenty countries, including: Mexico, Argentina, the UK, Germany, Turkey and Australia. We keep track of the location of people that contact us, and have used that information to create this map showing the locations of lawyers targeted by these frauds:
The map makes very clear just how widespread these fraud attempts are. Organized crime groups are behind many of these frauds.
These are simple bad-cheque scams packaged in a legitimate looking legal matter that is a set-up to have you deposit a fake cheque into your trust account. After making the deposit, you are instructed to wire money to the fraudster client. The fraudster gets real money and you are left with a shortfall in your trust account. Read this earlier AvoidAClaim blog post for more information on how these frauds work.
The legal matters you are retained on will look legitimate and will involve people that appear to be in your jurisdiction (these people will be in cahoots with the fraudster client). The most common matter types used in these frauds include debt or spousal support collections, business or inventory purchase loans, and IP licensing disputes. The fraudster will give legitimate looking ID and other relevant supporting documents. You will then receive a fake cheque that will look real as it has been printed on real cheque stock. This page has numerous examples of fake documents and cheques that lawyers have sent to us.
Canadian lawyers will get cheques or cashiers cheques from U.S financial institutions. U.S. lawyers will get cheques or cashiers cheques from Canadian financial institutions. This makes it difficult for the validity of the cheque to be checked when it is deposited.
Sometimes lawyers in multiple places are are simultaneously targeted with the same frauds using the same names. We have also seen different regions being hit by the same scams at different times, sometimes months apart. However, thanks to internet, a lawyer targeted in California can search by the fraudster client name and discover that the matter is a fraud.
More 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.
So keep the emails coming. While we know of lawyers being successfully duped by these scams, we’ve also found that making information available to lawyers around the world has been an effective weapon for helping many lawyers avoid being duped. If you have been targeted by one of these frauds, please forward any of the emails and supporting documents that you have received to firstname.lastname@example.org.
If you are a LAWPRO insured and 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.