Attention lawyers: beware of online fraud


Are you a solo practitioner? Do you have a small or medium size law firm? This article helps you protect your assets, business, and reputation from crooks who have already defrauded hundreds of lawyers and ruined many practices.

The story can develop in several ways, but conceptually it unfolds as follows. First, you receive an email with a simple question: Do you handle breach of contract complaints? If you do or don’t, but are ready to educate yourself and say yes, you receive a follow-up email with a brief description of the problem:

We appreciate your giving us the opportunity to discuss our case. We placed an order for certain goods from XXXXXX in August 2014 and the terms of the sales contract require us to pay 50% of the total cost of the goods ordered before delivery and the balance after we have received the same goods. However, after making the initial 50% deposit, we did not receive any goods as required. The goods are expected to be delivered in September 2014. They have been given more time to deliver the goods that they still could not meet. Therefore, we requested a refund.

We made several efforts to get them to refund the initial deposit, but to no avail. We have therefore decided to resort to legal means since there is an agreement prior to the transaction. Find the supplier details for your conflict check below.

The email also states that the client’s business is overseas and may have difficulty coming due to the distance. You do your due diligence and surf online to find out if the offending foreign company and local company are real. Both exist and are generally serious businesses with competent websites.

So far all is well, standard situation between buyer and seller, typical breach of contract – first year of law. You answer that your fees are conditional and that you will charge 33% of the recovery. You also say – of course you want to represent a foreign company and you can introduce yourself as an international trade litigation firm – that because the client suffered losses due to the breach, he also right to indirect damages. In addition, you ask them for more documentation to assess the case and the losses.

The same day, the answer is in your mailbox:

Following our request for reimbursement, they appealed to settle the payment in 2 installments within one month, the first installment of which was paid on November 20, 2014 for an amount of $ 497,500.00 after so much reminder and threat to involve a lawyer (payment receipt also attached). The balance was due in December 2014 and since then all our efforts to get them to hand over funds have been in vain. The details are all contained in our attached correspondence with XXXXXX.

In summary;

Total quantity of goods ordered: $ 2,540,891.00

Initial deposit made at XXXXXX: (i.e. 50% of the total amount): $ 1,270,445.00

Amount reimbursed (November 20, 2014): $ 497,500.00

Balance amount owed to Kyoei Steel Ltd: $ 772,945.00

“Oh my God, this is the case I was waiting for, my prayers have been answered: I’m going to pay off my loans and buy a new car; I’m also going to take a vacation to Hawaii and buy a Pomeranian for my daughter.” No so fast, breath. They have requested a deposit, which you will send to them. They also attached all the documentation: contract for the sale of goods, payment order, request for bank transfer, correspondence with the local company, etc. You check everything carefully: names, dates, goods, names of banks: all legitimate looks! OK, you write a standard mandate, probably reading it in its entirety for the first time and affectionately attaching it to the reply email: inhale, exhale, send. Now you nervously wait for the CEO of the wealthy foreign company to analyze the supply and signal the green light.

You are looking at Salvador Dali’s famous painting “The Persistence of Memory” because time has slowed down drastically, and you have not slept for 3 days thinking of Pomeranian. That sunny and pleasant morning that you will never forget, when you receive an email from the foreign CEO in which he congratulates you on a new hire and attaches the last page of the mandate with the signature. You burst out crying, hug your spouse and do the victory dance. For the first time in years, you say “hello” to the front desk people, smile and blow an air kiss at the housekeeper making them dizzy for hours. You fly like a butterfly.

Compliment of the day. After reviewing your agency agreement, we are unanimously satisfied with the details outlined therein and have decided to enlist the services of your company to help bring legal action against XXXXXX for breach of the sales contract.

Find the attached signed page of the Fee Agreement and the corresponding XXXXXX mailing form. We have informed our Debtor XXXXXX of our willingness to retain the services of your law firm to take legal action against them. Thus, we received a response from them. Any corresponding mail received from XXXXXX will be forwarded to you.

Once at the office, you email the offending local company to let them know that you are representing the foreign company in the breach of contract claim and that all communication between the companies should stop. The contract also provides for legal fees for the winning party. Now you own them.

You begin to draft a complaint and develop a litigation process strategy. But you can’t believe your eyes when you get an email asking you not to sue because XXXXXXX Company has magically decided to comply after a year of negotiations. Hm, it’s definitely because you got hired. The offending company now promises to issue a partial payment within the following days:

We ask that you give us one week to make full payment. A partial payment of $ 489,650.00 would be released between today and Wednesday. We assure you that you would have your funds / damage caused by our business in less than seven working days to avoid taking the case to court as it will damage our business reputation.

Day X has come. You eat vodka penne with a Greek salad ordered at the local Italian restaurant, when the secretary brings you an envelope with the back address of the local XXXXXX violation company. The chills go down through your body. With shaking hands you open the envelope and … pass out, for you have received the partial payment check in the amount of $ 489,659.00 from company XXXXXX and the letter promising to issue another check with the balance within a week.

You’re lying on the floor with a silly smile and glazed ceiling. When your staff brings you back to consciousness, you start to act quickly. First, send the client an email; second, deposit the check into the trust account; third, place an order for a three month old Pomeranian and order a case of Cuban cigars.

You walk into a local bank like a boss. You are not looking at anyone. Everyone feels the vibe that you are the only one. The agency manager rushes up to you, shakes your hand and asks if he can help you. You slowly take the check out of your file and give it to the manager. You see how his pupils dilate, his breath decreases and sweat escapes to his forehead. You know exactly what he’s thinking. He returns to his office and from that minute chaos sets in in the bank. When the check is deposited, you come out of the bank like a champion: the manager holds the door for you, and everyone is looking at you because they know: you have made a success of your life.

Your customer is delighted. They thank you and congratulate you, they want to hug you and kiss you, but they can’t because they are abroad. The client is asking you to return the funds (less the 33% contingency of $ 163,219.67) within 24 hours because they have responsibilities under other contracts. At this moment, you do not see, hear, speak or understand. You carefully subtract your contingency from the total and quickly transfer $ 326,439.33 to the foreign bank and close the office early giving each two days off with pay. Life is Beautiful!

Two days pass. You walk to your office listening to the latest news that Donald Trump has just lodged a dark forces complaint asking for the injunction to be issued, when your personal banker calls you and tells you that the check you posted there. a few days has rebounded …

You are parked at the Shell gas station. You are looking squarely at the passage of cars and people. The seconds turned to minutes, the minutes to days, the days to eternity. The brutal realization is slowly taking over your mind.

Don’t you want this to happen to you? Here are some tips for determining the scam:

• Call the local company allegedly in breach and investigate the matter of the contract.

• Look at the email address form you receive emails from: make sure it’s the same server the company has its website on and not @; @ and others.

• If the company is abroad, calculate the time difference and track the time you receive e-mails from them: see if the calculations correspond to the normal or perhaps extended work schedule in the customer’s country of origin.

• Be aware of the client’s competence in the legal field. The more expertise the client has, the more suspicion you should have.

• Request a Skype call.

• Use common sense and listen to your guts.


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