Warning to Lawyers! Beware of Internet e-Mail Swindle (Part (III)


Today’s New York Law Journal had a front page story, “E-Mail Scams That Target Smaller Shops on the Rise.”

We discussed these e-mail scams in earlier posts Part I and Part II.   

      The Law Journal article focused on an Albany firm which fell for the “collection case” con game.  The firm deposited the phony check for $384,700, and it instructed its bank to wire $374,700 to the client’s bank once the check cleared.  The law firm’s fee was $10,000.  Its bank made the wire transfer 2 days after the check “cleared.”  However, the bank sought to charge-back the entire amount later when it discovered that the initial check was bogus.  

The law firm has since settled with its bank which sought a charge-back from its custome, the law firm.  However, the law firm sought to have its malpractice insurer cover the law firm’s defense costs in the bank’s charge-back case.  The court ruled that the cost of defense was not covered under the firm’s malpractice policy since there was no “attorney-client” relationship with between the law firm and its bank.  This has been a big financial headache for this small Albany firm.

Again, we warn our colleagues in the bar that the internet is rife with these schemes.  Get involved at great risk.

Lesson # 1:  If it appears too good to be true, then it is.

Mark E. Seitelman, 4/20/10, www.seitelman.com.

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2 Responses to Warning to Lawyers! Beware of Internet e-Mail Swindle (Part (III)

  1. […] discussed another very dangerous scheme directed at lawyers  in our prior posts, Parts I, II, and III.    Fortunately, this newly reported scam is relatively […]

  2. […] This is a variation of the two other internet frauds that I discussed previously here, here, and here.  […]

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