US Law Firms Targeted By Cyberscams

Hugh Pickens writes "The San Francisco Chronicle reports that last year a Long Beach law firm received an e-mail from a Hong Kong businessman seeking help collecting debts from American customers. After a month of signing paperwork and exchanging telephone calls, the attorney received word that one debtor had sent a $200,000 cashier's check to pay off his balance. The attorney deposited it in his firm's account, subtracted his $10,000 fee and wired the remaining $190,000 to his Hong Kong client. Then the attorney's bank called and told him the $200,000 check had bounced. 'They send me a nice, big, worthless check,' says the attorney. In this case, the bank was able to prevent the wire transfer from reaching its destination, but attorneys say they are on the receiving end of sophisticated scams with increasing frequency that include attacks to steal client data that can be sold or used to learn the details of future litigation."

Comments

Also been a problem for regular people

[Kjella]

Classic scam:
1, Scammer pretends to be a buyer for some fairly expensive product, e.g. a car
2. Scammer sends false cashier's check to client
3. Scammer asks to cancel the deal because of some crisis, offers to cover any expenses he's had and a compensation for wasting their time
4. Many people will have compassion for their situation and agree to undo the sale
5. They wire the reminder - maybe 90% of the purchase price - back
6. The check sent in #2 bounces, the money returned in #5 gone and they're out a ton of money
7. Profit, for the scammer. No ??? here.

Re:How About ...

[Jah-Wren Ryel]

The first time I get payment from a client I always wait to see if it clears before moving forward on a project.

You should know then that checks never clear. They just fail to bounce. That may not seem like much of a distinction but it is precisely the reason many of these frauds work. In the US the law specifies a maximum hold time on deposits before the bank must make funds available to you. So, as long as the check fails to bounce during that period of time the fraudster usually gets away with their scam. But eventually it does bounce, and that's when the bank comes back to the person who made the deposit and they take their money back - if there isn't enough cash in his account, they sue him for the difference.

I know a guy who was scammed out of an exotic car - the 'buyer' gave him a bogus cashiers check. His bank took nearly three weeks before notifying him that they were "having difficulties" processing the check. By then, the car was half way across the country and had already been resold to a used-car dealer. FWIW, his car insurance eventually paid out because the car was essentially stolen, albeit through fraud rather than the more common ways.