Hey Scambookers we wanted to share this story with you. To inform you that you are not alone in this Nigerian scam. Sometimes, even smart guys get taken for a ride. The Internet Crime Complaint Center (IC3) has reported that they are still receiving reports of counterfeit check schemes targeting U.S. law firms.

Okay, this might have a bit of a Karma feel to it, but you’ve still got to wonder, how exactly do people keep falling for the Nigerian “pigeon drop” scam. That’s where you are contacted and told you can get a much bigger pay-out, but first, you just have to send some of your money to make the transaction possible.  Right, good luck with that.

This time, attorneys, who you might think would know better, became the target, and, yes, many fell for it.  Among them, the Minneapolis law firm of Milavetz, Gallop & Millavetz (MGM).  The Minneapolis StarTribune reports MGM became a victim after receiving an email from someone claiming to be a Korean woman who needed help in securing a $400,000 legal settlement for an injury in their area.

As it turns out, MGM was not alone.  The government had begun a secret investigation of Nigerian collection scams that target U.S. attorneys.  A Nigerian man and a Canadian resident were indicted in the case, but much of it remains under seal.  Still, the government says the two were part of an international conspiracy targeting lawyers and law firms, which nailed 80 victims to the tune of at least $32 million.  In all, there were some 300 known targets, with attempts to steal more than $100 million.

How It Works

So, how do highly educated, skeptical attorneys fall for this?  According to the federal indictment in Pennsylvania, it went down like this:  A co-conspirator contacts a law firm, usually by e-mail, seeking help to collect a legal settlement or payments from a divorce or real estate transaction. Another co-conspirator poses as a representative of the party who owes the money and then delivers a counterfeit check. After the check supposedly clears, the money is wired to a bank, usually in Asia, from which it disappears.  Click here to read the full story in the Minneapolis StarTribune.

Law Firm Blames Bank

Of course, we’re talking about lawyers being ripped off here, so while the money has disappeared, they believe someone needs to pay. In the case of MGM, the law firm is going after the bank, which frankly continues the whole karma thing.

Robert Milavetz of MGM says its bank, Wells Fargo, is at fault and should pay them back. The firm deposited the fake check from the Nigerian scammers in its Wells Fargo account.  Then, in an effort to perform due diligence called the bank to make sure the check had cleared. Bank employees apparently told the firm that “yes” indeed the check had cleared.  Of course, it had not.  So, when the firm wired the money to Asia, their “client” disappeared with the loot.  If we learned anything from the mortgage meltdown, it was to be careful about trusting what your bank tells you… but we digress.

In the end, Milavetz is going after Wells Fargo alleging the bank knowingly engaged in a transaction that involved criminal activity or was knowingly blind to the facts and law. The firm is seeking $396,500 from the bank. Wells Fargo issued a brief statement on the lawsuit saying, “We believe the allegations have no merit. We will vigorously defend, and expect to prevail.”

There is also another variation of this scam going around, where the victim law firm receives an email from what seems to be an lawyer located in another state who is requesting help with a client. Supposedly the client needs help collecting a debt from a company located in the victim law firm’s state. According to IC3, in some cases, the name of the referring lawyer and the debtor company used in the email were verified as legitimate entities and were being used as part of the scheme. Usually the law firm receives a signed retainer agreement and a check made payable to the law firm from the alleged debtor. Afterwards the client instructs the law firm to go deposit the check and to wire the funds, minus all the fees of course, to an oversees bank account. Finally the law firm discovers after the funds have been wired the check is counterfeit.

IC3 cautions law firms when engaging in transactions with parties who are handling their business solely via email, especially from parties claiming to live overseas. Lawyers who agree to represent a client in circumstances similar to the one previously described should consider incorporating a provision into their retainer agreement that allows the attorney to hold funds received from a debtor for a sufficient about of time in order to verify the validity of the check.

It’s little comfort to know that even supposedly smart guys get duped by this, but if you take anything away here, remember, there’s no such thing as easy money!

See Also

Why We Fall for Scams: The Human Brain Isn’t Wired to Avoid Warning Signs of Fraud
Kentucky Man Busted for ‘Catch Me If You Can’ Checking Scam with a Smartphone Twist
Beware “Reshipping” Job Scam on Sites like Craigslist, LinkedIn and CareerBuilder 

Source: consumerwarningnetwork.com, startribune.com