Since the last alert in Monday Briefs a further four notifications have come in.
One involved the payment of $400,000 by the client, based on the receipt of a fake email ostensibly from the solicitor. Again, it appears that emails were being monitored and at the last moment the crucial email was intercepted, and the trust bank account details altered. All indications are that it was the client’s computer that had been hacked.
Another involved the solicitor being contacted by a person with a foreign accent who stated that she was from Telstra, the solicitor’s computer was compromised, and Telstra needed the solicitor’s assistance in investigating the scam that was about to be perpetrated. The solicitor allowed her access to his computer and she said that Telstra would deposit $2,000 into the solicitor’s personal bank account (the solicitor provided the bank account details) and it would appear in the bank account the next day, whereupon the solicitor was to go to a 7/11 store and purchase $2,000 of iTunes cards.
The next day the solicitor saw that in fact $2,000 had been credited with the notation “Telstra” so proceeded to purchase $2,000 in iTunes cards. The solicitor was then asked to scan the card reference details in to his computer. The solicitor was then told that they would have to do the exercise again as the last transaction could not be properly followed. But this time to go to Woolworths to purchase the cards.
The next day the solicitor, saw that $2,000 had, again, been credited to the personal bank account with the notation “Telstra”. The solicitor went to Woolworths and this is when someone alerted him to the fact this may be a scam.
The solicitor went home, and this time accessed his trust bank account. The solicitor noted that the two lots of $2,000 had been debited to his trust bank account. Once given access to the computer she/they stayed in the system.
There was also a failed attempt at $350,000 as immediately before the money was to be transferred to the nominated client bank account the staff member happened to look at the deleted files in outlook and saw the real client email with the correct bank account details.
The last was another failed attempt as the fake email came in immediately after $1,000,000 was deposited into the solicitor’s trust account. Note, two law practices were involved and the solicitor sending the money telephoned first to confirm the trust bank account details where the money was to be transferred.
Old Scam Resurfaced
This scam usually begins with an email from an individual (and lately the email is accompanied by a passport photo) requesting assistance with an urgent transactional or litigation matter. The email sender is usually located abroad, whereas the other party to their matter currently resides in Australia. The email will ask for an engagement letter and once you request better particulars by return email they immediately forward a settlement cheque and tell you that the transaction in question has been consummated or the litigation has settled. It is at this juncture that fortunately, to date, the solicitors have contacted the Trust Accounts Department and we have told them to return the cheque if possible otherwise send an email stating the solicitor will not take on the matter and request an address to return the cheque.
The scam is that for little or no work the solicitor is advised to bank the cheque, which has to date always been a foreign bank cheque, retain a specified amount and then with utmost urgency transfer the balance into a nominated account which is usually a foreign bank account.
The reason the scam works is that although your bank will clear the foreign bank cheque in 3 days and you transfer the balance ($400,000 Canadian bank cheque is popular) the bank has not actually collected any funds. It can take up to 10 days for the foreign bank cheque to be collected by your bank. When it does not clear the bank will use the funds of your clients in the trust bank account to cover the transferred funds.
Red Flags to be aware of:
- The email sender is based abroad.
- The email sender does not provide a referral source (or suggests they found you through an online search).
- The initial email does not identify the law practice or solicitor by name.
- The email uses awkward phrasing or poor grammar.
- The email requests assistance on a legal matter in an area of law you do not practice.
- The email is vague in other respects, such as stating that the sender has a matter in the “attorney’s jurisdiction”, rather than specifying the jurisdiction itself.
- The email sender suggests that for this particular matter the “attorney” accept a contingency fee arrangement.
- The email sender is quick to accept your fees and not negotiate.
- The email sender assures you the matter will settle quickly.
The counterparty, if there is one, will also likely respond quickly, settling the dispute or closing the deal with little or no negotiation.
The email sender insists the money must be wired to a foreign bank as soon as the cheque has cleared.