Attempted Internet Scam Involving Michigan Trust Account
A Michigan law firm recently narrowly avoided an internet scam that has ensnared some attorneys in other states. We are reporting the scam to put members on notice to exercise extra diligence when presented with circumstances similar to those noted below.
The scam works like this—the law firm receives a referral from someone posing as an outstate attorney to enforce a simple contract dispute or collect a debt from a local corporation owed to a foreign company, normally Taiwanese (although any foreign company would work - the time difference complicates communications). The law firm, believing it is exercising due diligence, confirms that the prospective client is a real company trading on the Taiwanese stock exchange and then enters into a fee agreement, thereby placing itself in the trap. It sends a demand letter, and a month later receives a cashier's check in full payment, made payable to the law firm. The client is pleased and directs the law firm to wire the money, after deducting its fees and costs. The law firm deposits the money in its client trust account, waits for the check to clear the local bank, and wires the money to the client. Things fall apart when the bank on which the check is drawn notifies everyone that the check is a counterfeit fraud - by which time it is too late to stop the wire transfer, and the law firm's client trust account is now out the proceeds, which the firm has to replace. The scam works because the law firm erroneously believes that the check is good when it clears the law firm's bank. That is not the case. The first clearance is only provisional. The bank on which the check is drawn has additional time under the law to verify the check.
In the case of the Michigan law firm, one of its members became suspicious when the payment check arrived. It had all occurred too easily, without litigation, and with full payment. He checked the name and telephone number of the Alabama attorney who referred the case, called him, and discovered someone posing as the attorney had made the referral.
Beware of similar circumstances. Remember, those engaged in these schemes are devious and will use the names of actual companies, client contacts, and referring attorneys in an effort to sell the scam. If you suspect you have encountered a similar situation, two steps that may be helpful are: a) independently verifying the names and contact information provided to you, making contact with appropriate persons to verify the representation; and b) not disbursing the deposited funds until the bank on which the cashier's check is drawn clears the check; in some cases it is possible that could take up to a week or more, but if you keep a copy of the check, you could call the bank on which it is drawn to see if they will advise you when it will be or was paid.
State Bar Launches Program to Celebrate Attorneys' Contributions to Society
"A Lawyer Helps"—and the State Bar of Michigan wants everyone to know just how much. The Bar, in cooperation with a host of partners including civil legal aid agencies, bar associations, law schools, law firms and the Michigan State Bar Foundation, has launched a program to celebrate and support lawyers' public service.
"A Lawyer Helps" has two goals: recognizing how lawyers make a difference everyday for people and society and providing tools for them to continue doing so.
"Thousands of Michigan lawyers contribute pro bono or free legal services to low-income people every year, and thousands more give generous financial support for legal aid. They also give time by volunteering in their local communities," said Ed Pappas, president of the State Bar of Michigan. "We are extremely proud of that record, and 'A Lawyer Helps' will shine a light on their efforts." [Read More]
Sign Up to Eliminate Your Paper Dues Invoice
The State Bar of Michigan has embraced a goal to promote a greener environment, and we encourage our members to join this effort by signing up to pay your dues online and eliminating your paper invoice for the 2009-2010 fiscal year. By selecting this option, you will receive an e-mail in September 2009, instructing you to pay your dues online using your Visa or MasterCard. Online payment saves the cost of printing and mailing an invoice and expedites the receipt of your bar card. The process for paying your dues online has been streamlined, making logging in and retrieving your password easier.
Remember that if you plan on using a credit card to pay your dues, we only accept credit card payments online. Paper invoices must be paid with a check. Please visit the following link and enter your P number to eliminate your paper invoice:
Member Advisory is a publication of the State Bar of Michigan
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