"AvoidAClaim" Blog

The almost daily postings about new fraudster names can become a bit of a blur to readers (and us!) so we’ve decided to post a summary at the end of each month, starting with April of 2013.

April saw the most emails to fraudinfo@lawpro.ca we’ve yet received in a single month: 407. While there are ups and downs in monthly email totals (as low as 50, as high as 300) the average in the past two years has been about 200 a month.

17 new fraudulent names or scenarios were idenitified and posted to the blog, following from 34 new posts in March (an all time monthly high). All but three were commercial debt collection or business loan scenarios.

70% of emails in April were from the U.S., 27% from Ontario, 1% from elsewhere in Canada and 2% from outside North America. Since we started tracking emails in January of 2011, the cumulative breakdown of emails was 45% from Ontario lawyers, 45% from the U.S., 5% each from the rest of Canada and outside North America respectively. Year over year however, the total percentage of emails to us from U.S. lawyers has grown from 38% in 2011 to 42% in 2012 to 60% so far in 2013.

Here are the fraud posts we did in April sorted by scenario:

Commercial debt collection scam:

• Ichiro Itoh
• Al Fournier of Bjordal IndustrierAS
• Michael Jones of Bjordal IndustrierAS
• Zhidan Tang of Brone Electric Co.
• Niu Zhiming of Xiware Technologies
• Xian Chin of Shanxi Xinfusheng Machinery
• Ludvik Harald of JSC Tosmare Shipyard
• Sebastian Aksel of JSC Tosmare Shipyard
• Hiroshi Kitagawa of Eta Electric Industry

Business loan collection scam:

• Derick Abrams
• Akai Han
• Rufus Young
• Akio Wu Ryo
• Gary Seiders

Separation agreement scam

• Sharon Marcel
• Cynthia Woichun

Personal Injury settlement scam

• Eva Harvey

A comment left on this blog pointed us to a California firm’s Facebook page, in which they claim to be doing a lucrative business representing a particular woman who always seems to be having trouble with an ex-spouse…

Thanks to Walsh and Walsh P.C. for the laugh.

This past month the Ontario Association of Chiefs of Police introduced a crime prevention booklet entitled Crime Prevention: It Starts With You. TitlePLUS was a sponsor of the booklet and LAWPRO’s Ray Leclair, VP of Public Relations, spoke at the booklet launch.

The booklet is not specifically aimed at lawyers, though many of the crime prevention tips would apply in a law office as well as with the general public. In particular, the section on ‘phishing’ scams could help prevent frauds against firm trust accounts similar to the one we reported on recently.

Here is an excerpt from the booklet on avoiding ‘phishing’ scams:

What is Phishing?

Phishing is typically an email scam which tries to deceive people into thinking a legitimate organization is requesting private information. Also called “brand spoofing,” phishing is the creation of email messages and web pages that are replicas of existing, legitimate sites and businesses. These websites and emails are used to trick users into submitting personal, financial, or password data.

What to Look For:

• A phishing message is intended to get a quick reaction from you, using upsetting or exciting information demanding an urgent response, or employ a false pretense or statement. Phishing messages are normally not personalized.
• Typically, phishing messages will ask you to update, validate, or confirm your account information, etc., to avoid negative consequences. They might even ask you to make a phone call.
• The information being sought can include: Social Insurance Numbers, full name, date of birth, full address, mother’s maiden name, username and password of online services, driver’s license number, personal identification numbers (PIN), credit card information (numbers, expiry dates and the last three digits printed on the signature panel) and bank account numbers.
•  Often, the message or associated website includes official-looking logos and other identifying information taken directly from legitimate websites. Government, financial institutions and online payment services are common targets of brand spoofing. In some cases, the offending site can modify your browser address bar to make it look legitimate, including the web address of the real site and a secure https:// prefix.

How to Protect Yourself:

• Be suspicious of any email or text message containing urgent requests for personal or financial information (financial institutions and credit card companies normally will not use email to confirm an existing client’s information).
• Contact the organization by using a telephone number from a credible source such as a phone book or a bill.
• Never email personal or financial information.
• Avoid embedded links in an email claiming to bring you to a secure site.
• Get in the habit of looking at a website’s address line and verify if it displays something different from the address mentioned in the email
• Regularly update your computer protection with anti-virus software, spyware filters, email filters and firewall programs
• A number of legitimate companies and financial institutions that have been targeted by phishing schemes have published contact information for reporting possible phishing emails as well as online notices about how their customers can recognize and protect themselves from phishing.
• Regularly check your bank, credit and debit card statements to ensure that all transactions are legitimate.
• Always report phishing. If you have responded to a suspicious email, report it to info@antifraudcentre.ca (and if you are an Ontario lawyer who suspects they have been targeted by a fraud attempt you can contact LAWPRO at fraudinfo@lawpro.ca)

This is a warning from a U.S. title insurance company, advising that fraudsters are impersonating the company in an attempt to get real estate lawyers to divulge bank account information. This is less of an issue for Canadian real estate lawyers who still handle the transfer of money themselves (rather than using title insurer software), but it shows that criminal organizations are always trying to come up with new ways to dupe lawyers.

It’s also a good reminder that one should always be suspicious when asked to divulge bank account or other sensitive information. Providing those details or clicking on attachments in scam emails can lead to disastrous consequences for a law firm, as was the case with a firm in Hamilton in December.

Further to our post on AvoidAClaim yesterday (Fake Toronto law firms tied to an international inheritance collection scam), we have discovered another fake Toronto firm and another fake firm purportedly in Ghana. All four of these firms have websites are all virtually identical. The names and URLs for the fake firms are as follows:

• Hubbel and Steven LLP hubbelsteven.com
• Vaughan and Palmer www.vaughanandpalmer.com
• Farrell Mallon and Co Solicitors farrellmalonlaws.com
• William Mensah Chambers williammensahchambers.com

Some of the text on these sites appears to have come from a national Canadian firm and a well-known Altantic Canada law firm. Some of the lawyer bio content appears to have come from the same Altantic Canada law firm. These sites look very professional. They include area of practice information, lawyer biographies, contact information (street addresses, email addresses, phone and fax numbers) and even RSS feeds. They are very convincing, other than the fact that the group photo of the partners is actually a cast photo from Law and Order UK.

We learned of the first fake firm when a Toronto lawyer informed us of a website being used to lend legitimacy to an inheritance collection scam targeting a person in Europe. The target of the scam dealt with a European lawyer who in turn contacted a Toronto lawyer he knew from prior dealings. Our investigations lead us to the other three sites. Contact information in domain name registrations lead us to another site that is no longer operating.

We assume all four of these sites are being used for similar scams, although at this time we are not aware of anyone in Ontario being targeted. However, it serves as a reminder of the international nature of fraud attempts and how easy it is to mimic real firms to lend a scam some legitimacy.

Cross posted on Slaw.ca

In March of 2012 we posted a map that showed where fraud alerts from lawyers were coming from. It is these emails from lawyers that give us the information we use to post warnings on this blog. Nine months and 1,300 emails since we first did that post, here is the latest version of our “map of fraud”. We’ve heard from lawyers in 40 additional countries, sent out 90 new fraud warnings and almost exactly 50% of emails continue to come from lawyers outside Ontario. And we still have not had a fraud report from South Dakota!

Nearly 90 lawyers in Canada and the US have notified us that they have received an email from the purported Frank Zamora with regards to a breach of payment collection scam. For examples of other names attached to this kind of fraud see our Confirmed Fraud Page. For an explanation of how this fraud works see our Fraud Fact Sheet.

Here is the initial email:

From: “Frank Zamora”
To:
Date: 12/10/2012 09:22 PM
Subject: New message

How to handle a real or suspected fraud (more…)

The Law Society of Upper Canada has advised us that at least one Ontario lawyer has been targeted with a traditional bad cheque scam that indicated that the fraudster found the lawyer through the “Lawyer Referral Service”. This may be a new tactic to convince Ontario lawyers that the emails are legitimate.

This particular fraud was the Iwashima Lui business debt collection scam, though there may be others we haven’t seen yet.

The Law Society points out that the name “Lawyer Referral Service” is incorrect. The service has recently been renamed the Law Society Referral Service, and when a genuine referral has been made confirmation would be sent. Lawyers can also call the Law Society to confirm the validity of any referrals.

Do any of these names ring a bell: Kin Hang Cheung, Haru Hayate or Hideki Kazuhiro?

OR – is someone from overseas asking you to act on a real estate matter? Is a real estate agent you know sending you new business from an offshore client?

Be wary: Real estate lawyers like you (as well as real estate agents) are being targeted all over the continent by a new fraud scam.

To date we’ve heard from lawyers in Toronto (purchase of a Niagara property), Ottawa, London, Barrie, Orillia, Port Hope, Campbellford, Napanee and Trenton who have been contacted by Cheung. The Law Society of British Columbia sent a warning to B.C. lawyers about three real estate frauds attempted by this same individual. You can see a copy of this warning on the Law Society of BC website.

Red flags to watch for:

• client is overseas, has worked with a real estate agent in your area to complete an Agreement of Purchase of Sale;
• real estate agent (often known to lawyer) refers deal to lawyer, sometimes with copies of client ID and bank statements. See this AvoidAClaim blog post for copies of various documents used on this fraud;
• payments to be made, at least in one case, through the client’s stockbroker or other third party;
• cheque for $300,000 plus arrives shortly after lawyer receives the documents from the real estate agent, cheques allegedly sent on client’s instructions;
• cheques are drawn on bank accounts of third party business entities with no apparent connection to transaction (LAWPRO has seen cheques from many entities often using the names of actual local businesses including Moloney Electric Inc., Primerica, Reach Technologies Inc., SMS Rents Division of SMS Construction and Mining Systems), Downtown Porsche and Bioniche Life Sciences;
• cheque is for much more than required for deposit, and is to be deposited into the lawyer’s trust account;
• fraudster – who apparently has signed Agreement of Purchase and Sale that is subject to inspection clause or that has another avenue to back out of the deal – asks for his deposit back, presumably by electronic transfer, less a very generous amount for lawyer’s fees and disbursements;
• if the lawyer wires funds from his or her pooled trust account, the lawyer’s account will be short and perhaps overdrawn.

Click the links to see more details on these and other real estate frauds by individuals purporting to be Haru Hayate and Hideki Kazuhiro.

Canada Day is coming: Be on guard!

All lawyers are being targeted with bad cheque frauds: We’re getting reports of frauds that appear to be personal or business collection matters, spousal support collections, business loans and IP licence disputes.

The common names we are seeing include (click on these names to be taken to the AvoidAClaim blog for more details on these frauds) Nick Ualtar , Elena Kinoshita, and Tom Prodromou. We expect to see higher than usual fraud activity as we head into the Canada Day holiday weekend.

Don’t let your guard down & be caught short

Some lawyers are being fooled by these increasingly sophisticated frauds – which often result in significant shortfalls in their trust accounts.

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.

For more information

Get immediate updates: Subscribe to the email or RSS feed updates from LAWPRO’s AvoidAClaim blog.

Fraud Fact Sheet: 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.

A post on the TheNextWeb site indicates that a Norweigan IT webite, Dagens IT reported the breach. That site indicates that 6.5 million encrypted LinkedIn passwords have been posted to a Russian hacker site.

LinkedIn has responded that they are looking into the breach. To be safe, LinkedIn users should change their passwords immediately.

For more passwords tips, see this article from Law Practice Magazine: Don’t Be Passé With Passwords: Best Practices for Staying Safe

[Updated 3:30 pm Eastern]

Not a lot of info from LinkedIn on this so far today. Two earlier tweets indicating they are investigating and haven’t yet confirmed that a breach occurred.

A further tweet and post on one of their blogs at 2:30pm indicating they are still investigating, have still yet to confirm a breach has occurred, and a recommendation the LinkedIn users change their passwords and follow password best-practices (and they provide an excellent list of them).

Please change your LinkedIn password if you have not yet done so – and take a look at the password best practices in the LinkedIn post so that you use a password that is harder for the hackers to crack.

Not a bad time to change the passwords on your other accounts. If you use Google, consider enabling Google’s two-factor authentication, especially if you are using it for your law practice. See instructions on how to do this here.

You could also consider using a password manager like LastPast. It is a cross-platform and device tool that will safely store and remember passwords for you, thereby making it easier to use different and stronger passwords for your various accounts.