It can come as an email, a letter, a fax or even a phone call.
It appears to be a legitimate request for legal assistance from a
prospective client who is seeking representation in a debt
collection matter. The attorney and client negotiate the terms of
the relationship, including a fee agreement. The client presents
what appears to be a valid cashier's check, drawn on a reputable
bank, supposedly a settlement check from the debtor. After the
check is deposited in the attorney's client trust account, the
client asks that the funds, less the attorney's fees, be wired to a
Then it all collapses. The cashier's check was fraudulent and
doesn't clear. The IOLTA account has been looted, and the attorney
can seldom recover the transferred funds.
Sometimes the scheme involves other facts. For example, it could
be a request to seek collection on an unpaid property settlement
from an ex-spouse pursuant to a divorce decree. The papers all look
in order. But, in almost all cases, the attorney is being asked to
transfer funds to a foreign bank before the deposited funds have
been collected by the IOLTA account bank and become available to
cover the transferred amount.
This can never happen to you if you insist on a critical
safeguard: always wait for bank verification that the deposited
funds have been collected from the check issuer's account before
transferring any of the funds from your IOLTA account.
Sometimes there are other warning signs that may help you identify
that you are being scammed:
Is the email addressed to you personally or is it a generic
salutation? Generic salutations (like "Dear Attorney") are a good
reason to not respond.
Has the prospective client used the name of a prominent attorney
in the state as someone who recommended you? Check with the
referring party to see if it is legitimate.
Is the request outside your area of expertise? Do not refer a
solicitation to someone in your firm or with the proper expertise
if you haven't checked it out. Don't enable the scam.
Does the request lack specifics? That may indicate that it was
sent to multiple people?
Does the request contain odd legal terminology, spelling or
Does the communication use round numbers such as $400,000 exactly?
Round numbers can signal a scam.
Does the email detail a transaction where money is already owed
and you are merely being asked to handle funds for payment? This is
an important part of the scam.
There are affirmative practices that may chase a scammer away.
Require a retainer for your anticipated legal services. A check to
your office from the client is not necessarily proof that their
activity is not fraudulent, but most scammers won't bother
responding to your request.
Or request tax ID numbers and make representation contingent on
their agreement that a separate, segregated attorney-client account
be established for depositing only their funds.
According to the cyber experts, Internet scams are not going to
stop anytime soon. Not only do the scammers need the money more in
a down economy, but they know also that you, their target, may be
more vulnerable to "earn money now" solicitations.
What can you do if you think you might be the target of a scam?
Make a report immediately to the Internet Crime Complaint Center on
the ic3.gov website. If money has been lost, notify
local police or the FBI, as well as the Internet Crime Complaint
For more information, please contact the IOLTA Committee at (617)
Jayne Tyrrell is the director of the Massachusetts
Interest on Lawyers' Trust Accounts.