New variation of bad cheque equipment purchase scams involving buying medical equipment
Date First Reported: October 2022
Primary Name Associated: John Fulkerson
Description of Potential Fraud:
What is old is new again! We have learned that a new equipment purchase fraud involving medical equipment such as MRI machines has made its way to Ontario.
The fraud, which has been reported earlier this year in the US, follows the classic Equipment / Inventory Purchase Fraud. The lawyer is contacted to help a business (often located outside of Canada) to facilitate the purchase or sale of a large piece of medical equipment (ex: MRI machine). The fraudster will provide documentation about the sale. A retainer agreement will be signed, but the fraudster will delay in paying the retainer fee. Instead, the lawyer will be asked to deduct any fees from the debt payment.
The lawyer will then be asked to deposit the cheque from the sale or in the trust account and wire the balance (after fees are deducted) to an overseas account. Of course, the cheque is fraudulent and the lawyer will be left with a shortfall in the trust account.
In this type of scam, the fraudsters will often use the details of a real company, including web address, names of real employees and the mailing address.
These frauds can be caught by watching for the above red flags, conducting client ID and verification, following LAWPRO’s requirements on holding cheques in trust and always independently verifying wire instructions before sending them.
Here is the text of the email from the fraudster:
From: john fulkerson [email protected]
Sent: August 31, 2022 5:43 PM
Subject: Re: Website Inquiry
I have been contacted by Joseph Brant Hospital as regards to purchasing
our Cardiac Magnetic Resonance Imaging Equipment. We have been negotiating
and I have agreed to sell The used GE Discovery MR450 MRI Equipment to
Joseph Brant Hospital
1245 Lakeshore Rd,
Burlington, ON L7S 0A2
We have discussed and agreed on the purchase price and
outlined terms for the transaction. I need your legal
assistance to help draft a sales / purchase agreement.
This is a straightforward transaction.
This includes the insurance cost, shipping and
handling cost. Find attached details of The used GE Discovery MR450 MRI Equipment and agreed terms
for your review.
If this is something you can handle, Please email your retainer agreement for review and signature.
If you need to review the Letter of Intent, I can ask the buyer
Business Broker to forward you a copy, upon your request.
Please note this is confidential.
I look forward to working with you!
Co-Founder and Chief Operating Officer
Reflow Medical, Inc.
208 Avenida Fabricante
San Clemente, CA 92672
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 [email protected]. We use this information for the warnings we post on AvoidAClaim. We do not disclose the names of firms that have provided us with information.
Ontario Lawyers - Call LAWPRO
If you are an Ontario lawyer acting on a matter that you suspect might be a fraud, call LAWPRO at 1-800-410-1013 (416-598-5899). One of our Fraud Team members 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, we will work with you to prevent the fraud and minimize potential claims costs.
What can you do to help put a stop to the fraud attempt?
You can simply stop replying to the fraudster’s emails or inform them that you suspect fraud and will not act on the matter. You can report the fraudsters’ email addresses to the email hosting company. If you have a fraudulent cheque you can destroy it or send it to the fraud department of the financial institution it is drawn upon. In Canada, you can report the fraud to the Canadian Anti-Fraud Centre.
We are often asked if it is worthwhile to report the fraud attempt to the police in the hopes of helping catch the fraudsters. You can certainly report the fraud to your local or federal law enforcement agencies, but unfortunately it is often difficult, expensive and time consuming for them to attempt to shut down these online fraud perpetrators (though there are some successes).
What if the fraud has been successful?
If you have been successfully duped, please immediately notify LAWPRO as there may be a claim against you. See the LAWPRO website for instructions on how to report a claim.
For more immediate updates on fraud and claims prevention, 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. To proactively prevent trust account shortfalls and malpractice claims, LAWPRO encourages firms to teach their lawyers and staff about fraud and how to recognize fraud attempts.