Trust Account Scams
Trust account scams are not new, but it’s important to be aware. Moral – always wait 10 days to ensure that a check, even a cashier’s check, is valid.
You receive what appears to be a legitimate inquiry from a prospective client, often (but not always) from another state or country. Here is a new variant on trust account scams employing the urgency of the COVID-19 pandemic:
- Calls originate from what appears to be a legitimate medical equipment company, looking for an attorney to draft a lease agreement.
- After agreeing to do the work, you receive a cashier’s check, which you deposit in your trust account.
- The cashier’s check “clears.”
- The client asks you to make a wire transfer from your trust account to another account.
- After you have wired funds as directed, you learn that the cashier’s check was fraudulent, your trust account is now overdrawn, and you are liable to the bank for the deficit.
Scams like these have been active for more than a decade but are reoccurring now. The FBI has been notified. Read a detailed State Bar Ethics Alert from 2011 on Internet scams targeting attorneys. This alert describes how the scams operate and how lawyers can protect themselves. They also address the ethical issues and challenges presented when lawyers respond to such solicitations, including after the scam is discovered.
We will be reminding members of this scam several times through the year, join today to get access to these and other important scam notices!
The latest scam that fits the pattern in other counties is as follows:
The client came to the attorney seeking help collecting a debt from an unrepresented third party. The client paid a retainer and cooperated professionally. The opposing party agreed to pay with a cashier’s check. Turns out the cashier’s check was counterfeit. Sadly, it was such a good counterfeit that it was not readily detected as such until after the check presented as cleared and the attorney disbursed funds to the client.