19
Feb
15

The E-mail scam, ethics and claims

A San Diego attorney was scammed out of nearly $300,000 as a result of a sophisticated computer virus transferred by e-mail and started with the opening of an e-mail attachment. The scam was elaborate.  The virus was downloaded.  Later, when the attorney attempted to do some on-line banking, the bank site did not work.  His phone rang, and a person purporting to be with his bank asked him to use a special sign in page to input his pin.  He was also asked to put in some additional number, apparently wire transfer codes.  After a second phone call the next day, the attorney became suspicious and discovered the theft.

Don’t be someone else’s fast money victim.

The article notes that the bank did not cover the fraud.  It is possible that other banks may, as it will turn on your individual terms and conditions.

The impact of this type of scam is significant.  Financial implications are not the only issue.  Scams can lead to ethical complaints (especially if the scam hits your IOLTA account) and civil liability implications.

This particular scam ultimately resulted in the theft via wire transfer of money from the attorneys bank account.  Although the article is silent on this issue, I would presume the account was a general business account and not an IOLTA account.  That is important also, as an IOLTA loss can lead to an ethics complaint and civil liability to your clients.

The civil liability to your clients is doubly troubling because in many of these cases, the E&O insurer may deny coverage for the claims on the basis that the loss arises out of a normal business, financial scam, and not the practice of law.  The lost money may have been the property of your clients or needed to pay client expenses and vendors.

The most common attorney targeted scam is the large fee for the easily collected settlement scam.  I have discussed this scam before here, and I have discussed the E&O coverage implications of the scam here.

Patent attorney Brett Trout has a nice summary of this scam here.  Here is part of his summary:

The New Lawyer Scam
Online scammers targeting attorneys focus on the typical attorney protocol. Since most attorneys require a retainer, the scammer agrees to send the attorney not only the required retainer, but a large, up-front payment for all the attorney’s services. The scam goes something like this. If you will assist in collecting a large sum of money owed to the scammer, you get to keep a ridiculously large share of the proceeds. The scammer will have all of the money sent to you, you take your cut and you cut the scammer a check for the remainder. How can you lose?

The Large Check
The catch is that the check you receive is fake. The problem is that it is real enough to get deposited in your account. While the funds have not cleared, your account may reflect the entire balance in your account. You cut the scammer a check and before the original check bounces, you find yourself out a fairly large sum of money.

Read his tips on what to look for.  And be vigilant and careful in which e-mails and attachments you open.

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