Be Alert to a New Deposit Fraud Scheme Targeting Law Firms The following is an edited version of a report shared with us. Statewide Title, Inc. has not verified the information and makes no claims as to its accuracy. The American Bankers Association recently reported a new bank deposit fraud scheme that targets law firms. The typical scheme operates as follows: A fraudulent foreign client contacts a law firm by e-mail indicating they are involved in a legal dispute with a domestic company. That company will either settle the claim within the next few days or the parties will go to court. The law firm is asked to act as settlement agent, or possibly to represent the foreign ‘client’ going forward. Soon after, a counterfeit check is delivered to the law firm with the ‘opposing’ party listed as remitter. The law firm is instructed to deposit the check, deduct its fees and then wire the proceeds to the ‘client’. In one reported instance, a customer wired out $195,000 the morning after the check was deposited. One bank reported that the checks are always in the sum of $197,980. It is reported that the American Bankers Association has received reports from two law firms that they were hit by the scheme but were able to catch the counterfeit checks without incurring any losses. North State has reported an incident in North Carolina. Please make your colleagues aware of this scheme and that it is already affecting attorneys in our area.
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