March 3, 2014 – Organized crime groups are using a sophisticated debt collection scheme to defraud attorneys in the United States, according to a recent FBI report.
The FBI last week issued an advisory describing the scam and urging fraud victims to report crimes to a local FBI office or the Internet Crime Complaint Center.
The advisory says transnational organized crime (TOC) groups “hire unwitting attorneys to represent them for a fraudulent legal scenario, solicit them to deposit large counterfeit checks into their client trust accounts, and then persuade them to immediately wire the deposited amount to a foreign bank account controlled by members of the TOC group.”
According to the advisory, the FBI has received numerous complaints from victims nationwide. Members of the TOC group contacted the attorneys misrepresenting themselves as German or English companies in a loan dispute with a U.S. company. Initial contact is often made using email or social networking sites, such as LinkedIn.
“The perpetrator informs the victim that the foreign company is looking for a US-based attorney to help settle debt litigation with a US business,” the advisory states. “The reason for the alleged dispute may relate to defaulted loan repayment or an attempt to recoup losses for a purchase in which the item was never received.”
The perpetrator then informs the attorney that the U.S. business has contacted the foreign business, an agreement has been reached, and the U.S. company will immediately make a partial or full payment directly to the target attorney who seemingly represents the foreign business. The scammer then sends a fake cashier’s check to the lawyer.
The scammer directs the attorney to deposit the check into the lawyer’s trust account and take a retainer fee from the funds. If the attorney deposits the check, the bank may make funds available before the check fully clears.
The perpetrator will then send instructions to quickly wire the deposited money to a foreign bank account, such as accounts in Japan, hoping the transaction will take place before the check clears.
If the scam is successful, the bank will later notify the victimized attorney that the cashier’s check was counterfeit and the lawyer’s trust account suffers the loss.
Lawyers who encounter situations like this should verify a check’s authenticity from bank officials before depositing a check. Lawyers should also independently contact the U.S. business from which the perpetrator purports to be collecting money.