"Avoid A Claim" Blog

The following is the text of the August 26 2010 e-blast LAWPRO sent to Ontario lawyers warning them about an ongoing collaborative family law cheque scam.

Almost every day LAWPRO® hears from lawyers who find themselves the targets of various kinds of frauds. While this message is not a full fraud alert, we felt we should advise lawyers to be on guard, as there has been a significant increase in the number of collaborative family law agreement frauds reported to LAWPRO over the last week. Almost 20 firms have been targeted in the last four business days. We also urge lawyers to be extra cautious as we approach Labour Day weekend, as we have seen an increase in fraud attempts around long weekends and holidays in the past.

These recent frauds have some new twists but are very similar to the collaborative family law agreement frauds we have previously warned lawyers about.  See the previous fraud alert here. These frauds have been reported to the police.

The first new twist on these frauds is that the initial contact is a letter (not an email) delivered by Canada Post. That letter is from someone claiming to be Karen L. Clark. (Click to enlarge)

The contents of the letter are virtually identical to the contents of the initial contact email used previously (i.e., Clark and ex-husband David M. Baker have signed a collaborative family law agreement that requires a payment of spousal support by Baker).

The second new twist is that each of these letters include a very real looking but counterfeit cheque or cashier’s cheque in the amount of $145,000. (Click to enlarge)

The counterfeit cheques appear to come from St. Christopher House and are drawn on an account at a CIBC branch on Ossington Ave. in Toronto.

The counterfeit cashier cheques appear to come from the Chase Bank. In the letter Clark indicates there is some urgency to cash the payment from Baker in case he changes his mind and urges the lawyer to take a retainer from the payment.

Please proceed with caution if you receive email messages or letters asking you to assist with the collection of spousal support arrears, or any other letter or email message that appears suspicious. Many lawyers are not replying to or acknowledging these messages when they are clearly attempted frauds. In cases where it is unclear, lawyers are replying with requests for identification and more details about the client’s current whereabouts and past circumstances of the matter, etc. They are also explicitly indicating that they will not proceed with work unless they have a signed retainer agreement and have received payment of a retainer.

Remember that the information and identification provided by the fraudster can look legitimate, but there likely will be minor inconsistencies or things that don’t add up. The fraudster’s reply usually includes a promise to pay the requested retainer. However, when the payment from the ex-husband or debtor shows up, usually a day or two later, the fraudster then says take the retainer from the payment.

If there are things that just don’t add up on a matter you are handling, ask further questions and have the client explain any inconsistencies. Does the matter make business sense? Do the terms of the contract or agreement look proper and complete? If the agreement provided to you has the names of lawyers in it, check whether they are called to the bar in the appropriate jurisdiction. This recent post on the AvoidAClaim blog has links to provincial, territorial and U.S. state lawyer licensing databases.

If you receive what appears to be a certified cheque or bank draft, contact the issuing bank to confirm that it in fact issued the cheque before you deposit it in your trust account. Even if the issuing bank confirms the cheque is legitimate, do not immediately release or wire funds to the client. Cheques sent to a U.S bank can take a week, and sometimes significantly longer, to clear.

If you have been targeted by one of these frauds, please advise Dan Pinnington (dan.pinnington@lawpro.ca) or call 416-598-5863. So that we can keep current on the types of frauds that are occurring, we would appreciate receiving copies of initial contact emails or letters and counterfeit financial instruments.

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

Be on guard as holiday approaches

In the past fraudsters have been particularly active in the days before long weekends and other holidays. Presumably this is to take advantage of circumstances when lawyers and law firms staff will be busy or more distracted with other things. Please be cautious as we approach the Labour Day Holiday weekend.

Please see further information in the Keep your guard up! More sophisticated cheque scams targeting lawyers article from the May/June 2010 issue of LAWPRO Magazine. Further fraud prevention information and resources are available on the practicePRO Fraud page (www.practicepro.ca/fraud), including the , a handy reference for lawyers and law firm staff that describes the common frauds and the red flags that can help identify them. For more immediate updates on fraud and claims prevention subscribe to the email or RSS feed updates from LAWPRO’s AvoidaClaim blog.

Cross posted on Slaw.ca

Do you know where the greatest risks of a malpractice claim come from? More importantly—did you know there are simple steps you can take to reduce the risk of a claim being made against you?

The July/August issue of Law Practice Magazine is devoted to helping you avoid the dreaded allegation of legal malpractice, as well as other dangers to your law practice.

LAWPRO’s claims statistics indicate that four out of five lawyers will face at least one claim during the course of their careers. So the odds are you have already experienced a claim or two—and if not, you likely will. Let’s call this the bad news. What’s the good news? Many claims are preventable. The surprise for most lawyers—and the key take-away—is that failures to know or apply substantive law do not cause the majority of malpractice claims. The other significant causes of claims are task and deadline management errors, lawyer-client communications issues and conflicts of interest. I review the common errors in our cover story, and explain how improving basic law practice management skills can reduce your risk of a claim. The Web Extra has details of The Most Common Legal Malpractice Claims by Type of Alleged Error for US and Canadian claims.

Conflicts expert William Freivogel brings us up to date on conflicts risks, and Malcolm Mercer walks through the steps law firms can take to implement risk management strategies. Chris Stiegemeyer explains what underwriters look for (and don’t want to see) when reviewing malpractice insurance applications—and he has tips to help lower your premium.

In terms of unpleasant things, difficult clients probably rank slightly behind a malpractice claim for most lawyers. Justice Carole Curtis, who practiced family law for 30 years, discusses how to protect your practice and sanity when dealing with different types of difficult clients, while Sheila Blackford describes how to recognize them. A note of thanks to Sheila for her assistance in putting this issue together as well.

To reduce exposure to other risks, be sure to read Jim Calloway’s tips for recognizing bad cheque scams, along with David Ries’s explanation of new and expanding obligations to protect confidential client data. With all the foolishness happening on the Web, the issue would be incomplete without a discussion of online dangers. Michael Downey guides us through the online trouble spots, with invaluable advice on avoiding liability. It can be a dangerous world out there.

It was great to have the opportunity to spread the claims prevention gospel to Law Practice readers – and to share it further with Avoid A Claim readers – and I hope this issue of Law Practice helps you stay out of trouble.

Cross posted on Slaw.ca

The following is the text of a Fraud Alert sent by LAWPRO to Ontario lawyers on June 29, 2010. Due to the response we received from our previous alert on June 17 we felt it was important to make lawyers aware of new details we’ve learned about this scam.

Last week’s fraud warning e-blast on the collaborative family law agreement fraud prompted dozens of calls and emails to LAWPRO. At least 30 Ontario lawyers indicated they had been recently targeted or were in the middle of dealing with a matter involving this exact fraud. These calls and emails have helped us better understand how this fraud works, and how the fraudsters are taking steps to appear ever more convincing and legitimate.

With this follow-up e-blast, we are sharing this information to help you avoid being duped. It is critical that all lawyers be alert to this and similar bad cheque frauds. Lawyers in Ontario and several other provinces are being targeted on a daily basis.

The essence of these bad cheque frauds is an otherwise legitimate-looking client file that creates circumstances that trick you into quickly disbursing funds from your trust account. The following points will help you appreciate that you must be wary of some of the circumstances that might otherwise make a fraud appear to be a legitimate client matter:

• Don’t be fooled by e-mails personally addressed to you: Some of the initial contact messages we have seen are personalized with the lawyer’s first and last names appearing at the start of the body of the message. (See this post on the Avoid A Claim blog for an example of an initial contact message.)
• Don’t be fooled by a follow-up to the initial contact message: Many lawyers who ignored the initial contact message received an email follow-up message asking if they received the initial contact message. See below for an example of one of these follow-up messages.
• Don’t let you guard down because it is a referral from another Ontario lawyer: Two Ontario lawyers that don’t practice family law indicated that they forwarded the initial contact message to lawyers they knew practised family law.
• Don’t be fooled by a referral from a foreign lawyer: In two instances the initial email was drafted to appear that it was coming as a referral from a UK lawyer.
• Don’t be fooled by a British or European name: In earlier versions of this fraud the clients had an Asian name. In most of the more recent attempts the client has a British or European name.
• Don’t be fooled by legitimate looking identification: The fraudsters are providing identification without hesitation. We have seen colour scans of the identification pages of a Chinese passport and US driver’s licences from various states including Michigan, Illinois, and Alabama.
• Don’t be fooled by a “collaborative family law agreement”: We have seen seven different versions of the same collaborative agreement. See one version of it here. The only differences are the amounts owing and the names of the client, the ex-spouse and their respective lawyers.
• Don’t be fooled by detailed background information: We have encouraged lawyers to ask for further background information when there are suspicions as to whether the matter is a fraud. This remains one of the best ways to determine if the matter is a legitimate one. However, the information provided by the client must be carefully reviewed for reasonableness and consistency as the replies to requests for further information are becoming more detailed and convincing. They now include information that ties the client to Ontario. See an example of a very detailed reply below.
• Don’t be fooled by phone calls that appear to be from local numbers: A few lawyers have received phone calls from these fraudsters which caller-ID indicated were local calls (i.e. from the same area code). Note that it is very easy to fake or “spoof” an Ontario area code and phone number with calling cards or VOIP phones.
• Don’t be fooled by local addresses and phone numbers: In some cases the fraudsters are providing background details that have a local nature; for example, an address where the couple lived, local home or work address for ex-spouse.

Trust your instincts

No doubt, some of you will say that all or most of the above points match many of your legitimate files. These bad cheque frauds are becoming far more sophisticated and spotting them is becoming much more difficult. In most cases there won’t be a single obvious factor that clearly indicates the matter is a fraud. It will be a number of smaller things that just don’t quite add up.

Trust your instincts. If things don’t add up, ask more questions and dig deeper. Get the client on the phone and ask them to provide further background and explanation for anything that is inconsistent or that doesn’t make sense. Have them confirm details in the information they already provided to you and be especially wary if the client is hesitant or unclear on background facts. Don’t be naïve. In reply to our blast last week one lawyer said, “I’m relieved to hear you say that because I’m feeling sheepish for not having recognized that this was a scam from the get-go.”

If you have suspicions, carefully check and verify any background details provided to you. Ask for documentation from the client that will confirm details of any information provided to you. You can do a reverse lookup of phone numbers provided to you or that appear on call display; Google any addresses provided to you. Get the names of lawyers that previously acted for the client or ex-spouse, check online databases to verify they are real lawyers and ask for permission to contact them.

Ultimately, getting the retainer funds or payments from the ex-spouse irrevocably wired to your bank account is the only way to really protect yourself from this type of fraud. If these wires are coming from another Canadian financial institution they should come via the Large Value Transaction System (“LVTS”). If they are coming from a financial entity outside of Canada, the client or ex-spouse’s bank should make arrangements with your bank to wire the funds to your account.

As an alternative to getting funds wired into your account, tell your client that your firm’s policy is that all funds deposited by cheque or bank draft will be held for 30 days or until your firm is able to get confirmation that the funds have cleared.

Finally, you should terminate the retainer if you remain suspicious that the matter is a fraud.

Beware of losses due to exchange rate fluctuations

Three lawyers indicated to us that their banks asked them to make up losses due to exchange rate fluctuations on US dollar cashier’s cheques they deposited that turned out to be counterfeit. These losses ranged from $3000-$5000. In one case the lawyer was successful in having the bank reverse these charges after he elevated a complaint above the branch level indicating that he had been told at the time of deposit that the instrument was valid.

Example of a follow-up message

We have seen several cases where lawyers reported that they received a second message that was a follow-up to the initial email contact. This is the text from one of those follow-up messages:

Dear Counsel

Regards
[Client first and last name]

Example of a very detailed reply to a request for further information

As stated above, the fraudsters are now providing more detailed background information. This is a reply that one lawyer received when they asked for more information:

Dear Counsel,

[Client first and last name].

Cross posted on Slaw.ca

The following is the text of a Fraud Alert sent by LAWPRO to Ontario Lawyers today June 17, 2010. Lawyers in Saskatchewan were the targets of this same fraud in May, and I expect lawyers in other provinces are being targeted as well.

Several lawyers have contacted LAWPRO over the last few weeks to advise us they have been the targets of a spousal support collection scam involving a collaborative family law agreement. One Ontario lawyer was successfully duped by this fraud.

We decided to send a warning to the profession as this fraud appears to be targeting many lawyers and the people behind it are very persistent and convincing.

The email communications from these fraudsters have reasonably good spelling and grammar in them. The background details provided appear to be legitimate, including information about residing in Ontario in the past, the ex-husband’s current and past employment etc. The fraudster will provide what appears to be legitimate identification (e.g. a U.S. state driver’s licence) and say he/she is residing overseas at present. The fraudster will readily sign and return a retainer agreement and promise to pay for required work at regular hourly rates. Note, on these frauds there is no promise of a huge contingency – one of the usual red flags of a fraud.

It appears likely that the same people are behind these fraud attempts as the text of the email messages and the collaborative family law agreement sent to each lawyer are more or less identical, save and except for the amount of arrears and the names of the husband, wife and their respective lawyers.

Typical fraudulent email

In several cases, the text of the initial email was as follows:

Subject: Request for Legal Representation.

Body:
Attn: [lawyer’s first and last name]

Hi Counsel,

Yours truly
Wife’s first and last name

Fraudsters follow through
Sending a reply to the initial email triggers a quick reply from the fraudster that includes more background on the couple’s relationship and a copy of a collaborative family law agreement. Most of the terms of the agreement look reasonable and it is drafted to appear that two lawyers assisted in its preparation. A copy of one of those agreements is available here.

Within a day or two of getting the agreement there is another message indicating the ex-husband is willing to make payment, and one or more cheques arrive shortly thereafter. The lawyer is then pressed to wire the monies offshore.

Please proceed with caution if you receive an email message asking you to assist with the collection of spousal support arrears.

Many lawyers are not replying or acknowledging these messages when they are clearly attempted frauds. In cases where it is unclear, lawyers are replying with requests for identification and more details about the client’s current whereabouts and past circumstances of the relationship. They are also explicitly indicating that they will not proceed with work unless they have a signed retainer agreement and have received payment of a retainer.

The information and identification provided by the fraudster can look legitimate, but there likely will be minor inconsistencies or things that don’t add up. The fraudsters’ reply will include a promise to pay the requested retainer. However, when the payment from the ex-husband shows up, usually a day or two later, the fraudster then says take the retainer from money the husband sent.

If there are things that don’t add up, ask further questions and have the client explain any inconsistencies. Do the terms of the agreement look proper and complete? If the agreement provided to you has the names of lawyers in it, check whether they are called to the bar in the appropriate jurisdiction. This recent post on the AvoidAClaim blog has links to provincial, territorial and U.S. state lawyer licensing databases.

If you receive what appears to be a certified cheque or bank draft, contact the issuing bank to confirm that they in fact issued the cheque before you deposit it in your trust account. Even if the issuing bank confirms the cheque is legitimate, do not immediately release or wire funds to the client. Cheques sent to a U.S bank can take a week and sometimes significantly longer to clear.

If you have been targeted by one of these frauds please advise Dan Pinnington (dan.pinnington@lawpro.ca) or call 416-598-5863.

Be on guard as holiday approaches
In the past fraudsters have been particularly active in the days before long weekends and other holidays. Presumably this is to take advantage of circumstances when lawyers and law firms staff will be busy or more distracted with other things. Please be cautious as in light of any interruptions to banking services that may occur due to the G20 Summit and as we approach the Canada Day Holiday.

Please see further information in the Keep your guard up! More sophisticated cheque scams targeting lawyers article from the most recent issue of LAWPRO Magazine. 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.

Cross posted on Slaw.ca

Thanks to Kerri at the CBA for bring this May 2010 Law Society of Saskatchewan fraud alert to my attention.

It provides details (including copies of the correspondence and the collaborative family law agreement) about an attempted spousal support collection fraud that targeted a Saskatchewan lawyer in May. It really jumped out at me because the collaborative family law agreement provided by the fraudster was almost exactly identical to one used for a fraud attempt against an Ontario lawyer in April this year. The fraudster, who claimed to be Karen L Clarke in Saskatchewan, used a different name in Ontario – Tanaka Sadasuke. The name of the ex-husbands and amount of support to be paid were different as well. Otherwise, everything else in the two agreements was identical, including the date it was signed and names of the two lawyers allegedly involved in negotiating the agreement – Jennifer Harper and Andrew Rosenberg.

In both cases, a reply to the fraudster’s initial email prompted further communications with the fraudster, and in the Saskatchewan fraud, a counterfeit cheque from the ex-husband. You can see the correspondence, the agreement and the bogus cheque from the Saskatchewan fraud in the Law Society of Saskatchewan bulletin.

Be alert and vigilant –fraudsters continue to target family law lawyers.

Cross posted at Slaw.ca

I have had calls from lawyers in the midst of handling apparent fraud attempts who were wanting to verify whether the lawyers named as the drafter of the collaborative family law agreements presented to them by the fraudsters were in fact real lawyers. There were names and signatures in the agreements – but nothing else. No firm names, telephone numbers, addresses etc. Red flag!! Searches of the internet failed to turn up anything.

So where can you go to attempt to establish if you are dealing with a real lawyer that is in good standing?

A newly updated LLRX article, A Compilation of State Lawyer Licensing Databases, has a great list of the lawyer licensing databases, as well as the phone number for each licensing authority for 43 states.

And, here is the same list for the Canadian provinces and territories :

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Nova Scotia
• Northwest Territories
• Nunavut
• Ontario
• PEI
• Quebec
• Saskatchewan
• Yukon

Cross posted on Slaw.ca and Lawyer Success Tips

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 Slaw.ca

The ABA Legal Technology Resource Center blog posted a warning this morning that all of us should pay heed to: Be Careful! Twitter Phishing Catches Lawyers, Too

What is “phishing”? Email messages (or even tweets) that trick innocent users into entering their account information (for any account: a Twitter account, an email account, a bank account etc.) into a fake log in page, effectively handing control of their account to a malicious third party.

In the case of these recent Twitter phishing attempts, the usurper then uses the innocent individual’s Twitter account to send out spam, malware, and more phishing attempts via Twitter’s “direct message” (DM) feature.

Don’t think you won’t be fooled. While I don’t know of anyone hit in the latest round of Twitter phishing, last year one of my more tech-literate friends was tricked into revealing his MSN account login info (the people in his address book then got a message asking them to send him money so he could get home as he was stranded in a foreign country after having his wallet and passport stolen). And, an otherwise very bright lawyer I know was recently tricked into disclosing his bank account access info.

A phishing message will get your attention because it will play on the fear of your account being hacked. The phishing message and the fake login page will look very real. It is all too easy to be fooled by these scams. There is good advice on how to recognize phishing and how not to get tricked in the LTRC post. Please read it!

Cross posted on Slaw.ca

Just over two months ago I did posts on SLAW and AvoidAClaim that warned family law lawyers to be aware of bad cheque scams on matters involving the collection of outstanding spousal support. [See either of the earlier posts for the actual text of one of these messages.]

Family lawyers continue to be the targets of fraud attempts – even more so than two months ago. On an almost daily basis I am getting at 2-3 calls and emails from Ontario lawyers who have been approached to act on matters that are clearly frauds. On some occasions it appears dozens or even hundreds of lawyers are targeted with a single email blast.

Lawyers in other practice areas must remain vigilant as well. We continue to see attempted frauds involving debt collections, and we also continue to see real estate frauds as well (more ID theft now, as flip frauds are harder in a slower market when property values are not rising).

My practice management advisor colleagues in other provinces and states are telling me that they are also seeing large numbers of attempted bad cheque frauds – and some successful ones too. While I am sure bad cheque frauds are just a prevalent in the U.S., the problem is hidden as in any given state lawyers are insured by many different insurers, and some have no insurance at all. Good to see that the U.S. legal trades have finally picked up on this:

• An ABA Journal article on $500,000 in successful email frauds in Hawaii
• An ALPS newsletter on the million dollar plus frauds they are seeing

I hope increased awareness by lawyers of the frauds that are targeting them will help some avoid being victimized.

To keep lawyers informed of how frauds targeting them are evolving, I wrote this post to highlight some aspects of recent frauds we have seen.

• In Ontario we have seen three instances where fraudsters have forged multiple cheques written on law firm trust accounts (either from scratch or on cheque stock). While we are not familiar with all the circumstances in which these various cheques were tendered, one has to presume that the fraudsters intended to benefit from the fact that a cheque written on a law firm account would receive less scrutiny than one coming from an unknown entity. In one case, several counterfeit cheques were created in an apparent attempt to take funds from the general account of a law firm’s holding company.
• I have seen several attempts at frauds in the last few months where the amount involved was lower, and thus appeared to be more reasonable and real. For example, $150,000 on a spousal collection matter looks more reasonable or typical as compared to $850,000.
• I am also seeing frauds where the fraudster is making efforts to appear to come from a trusted referral source. For example, the fraudster is contacting a real estate agent and asking for the name of several lawyers in a particular community and when the initial call or email comes in the reference source is highlighted. My friend Jim Calloway saw an example of this in Oklahoma just last week.

Sorry to sound like a broken record on this, but keep your guard up and follow these steps to avoid being duped:

• Make sure you are familiar with the common types of bad cheque frauds that target lawyers, and the red flags that can help you spot the fraudulent matters.
• Educate your staff on common types of bad cheque frauds their associated red flags. Law firm staff can sometimes be in a better position to spot fraudulent matters. We have seen cases where junior lawyers, support staff or law office accounting staff have prevented frauds because they spotted red flags that the lawyer did not see.
• Religiously follow the client identification and verification steps required by the know-your-client rules.
• Carefully review the details of any matter you are handling to make sure it is a legitimate one. If things don’t add up, ask more questions and dig deeper.
• Be cautious and check the validity certified cheques or bank drafts deposited into your trust account. Ideally, try to have funds deposited in your account by a wire through the LVTS system.
• Cross-check bank and payor information (spelling of name, address, account and transit numbers, phone numbers) on independent sources (e.g., a bank or payor website).
• Never be in a rush to disburse funds from your trust account – especially if your client is really pushing to get the funds quickly.
• Always remember, if it looks too good to be true, it probably is.

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.

Lastly, call your insurer if you suspect you have completed or are acting on a matter that appears as if it might be a fraud. Claims staff can talk you through the common fraud scenarios they are seeing to help you spot red flags and ask the appropriate questions of your client to determine if the matter is legitimate. And, if you have been duped, they can help you take appropriate steps to respond and deal the matter.

Cross-posted on SLAW

practicePRO’s claims prevention and law practice management resources continue to grow in popularity with lawyers. In 2009 almost 150,000 copies of our articles, checklists and precedents were downloaded.

We’ve compiled the list of the forty most popular downloads for 2009. Many of them are consistently popular year to year, such as Peg Duncan’s e-discovery reading list, limitation periods charts, retainer precedents and various technology articles. There were a few interesting developments though:

• The Sample Budget Spreadsheet came in in the top spot, with twice as many downloads as last year. A sign of lawyers taking a closer look at their finances in a tough economic year?
• The LawPRO Fraud Fact Sheet had 2,500 downloads, and has proven to be a very popular resource for lawyers looking to avoid becoming victims of the ever more sophisticated frauds targeting them.
• Lawyers love their BlackBerrys. Our BlackBerry 101 tips article from the summer of 2008 is still in the top ten a year later.

The top downloads list is a good indicator of what’s of interest to lawyers year over year, and what issues are concerns in certain years in particular. We’ve tracked the top downloads for each of the past four years.

See the forty most popular downloads for 2009 for tools and resources you can use to reduce your risk of a malpractice claim. The top downloads of 2008 and 2007 are also posted on this page.