Attorney / Collection Check Scam Notice

These crimes are perpetrated by Canadian and Nigeria based West African Organized Crime groups and will involve counterfeit negotiable instruments in one of the following scenarios.

Scenario 1

This scam involves an out-of-country client (Korea or Japan) who supposedly has obtained a divorce and her ex-husband has not paid the settlement. Somehow the ex-husband finds out that she has contacted you and you will receive an email to that effect as well as a counterfeit Cashiers check via FedEx, UPS or regular stamped mail from Toronto, upstate NY or NJ.

Scenarios 2 - 4 (most prevalent in the past few weeks)

A supposed indebtedness for goods or services, loans or "purchase" of real estate.

The article below was written at the request of the DOJ and describes this scam in sufficient detail as well as what happens when a firm deposits the check into their trust account. Your details may vary slightly, however the fraud remains exactly the same.

If you have initiated a wire transfer, it is imperative that you stop this transfer immediately if you have not already done so. The bank will hold your firm liable for the entire amount once the counterfeit has been discovered.

It is strongly recommended that you cease communications with these individuals and certainly do not advise them that you have been warned or inform them of any actions taken by you, your bank or law enforcement. Surprisingly, a few targeted firms have forwarded warnings to the suspects, an action which could easily be construed as obstruction of justice.

While one arrest has been made (see http://www.fbi.gov/philadelphia/press-releases/2011/man-involved-in-a-collection-scam-targeting-law-firms-in-the-united-states-and-canada-extradited-to-united-states), this is an active case as three copycat groups are still in operation.

Attorney / Collection Scam - Understanding the crime

It has been dubbed the "Attorney/Collection" scam and has extracted millions of dollars from law firms in the US & Canada. While started by one Nigerian criminal group in Toronto, there are now 3 additional "copycat" groups participating due to the success of the first group. These additional groups are operating out of the Toronto area and the UK. The law firms are contacted first via email explaining that they wish to engage the law firm's services for collection of overdue accounts, most being larger than $420,000 each. Alternately, the firm receives a "referral" from another firm.

Once communications begin, the "debtor" somehow finds out about legal action being taken, contacts the law firm to tell them they will pay. The firm receives a counterfeit cashiers check via UPS or FedEx, most often but not always drawn on CitiBank. To date, over $500,000,000 in counterfeit Citibank cashiers checks have been sent to attorneys.

The check is deposited in the law firm's trust account. Within a few days, when the bank provides the firm with a provisional loan for the value of the check and the firm mistakenly believes that the CFT has actually been made good, the law firm wires the "due" amount to the scammer's "company" which in reality is a money laundering account somewhere in Asia, where literally hundreds of accounts are set up for this purpose. Once the bank finally discovers the check is counterfeit, it holds the law firm responsible for the entire amount.

The Nashville Post confirmed that Bradley Arant Boult Cummings recently fell victim to the scheme, wiring in excess of $400,000 to the scammers' bank account, even after performing what turned out to be faulty diligence on their part and contacting a supposed "third party" to verify the funds. Reports of a "quick arrest" by the FBI have been confirmed to be false.