Lawyers Get Conned, Too, By Fraudulent Cashier’s Checks

Posted on March 16, 2014 in Planning & Advisors

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It’s been a while since I received one of those e-mails SCREAMING IN ALL CAPS from the Kingdom of Djibouti or Nigeria, or some such place, asking me, in the most solicitous of tones, to assist with a financial transaction. A money trade of sorts. Or to help dislodge some funds from a U.S. bank account that need to be routed through my account to send overseas. They always gave me a good laugh. The cynical New Yorker in me asked, “What tomato truck do you have to fall from to fall for that scam?” [For fullest New Yorker effect, pronounce tomato like “tuh-MAYD-uh”]

Well, apparently, the scammers are getting more sophisticated, and some of my bretheren at the bar have fallen for it. As reported in the California Bar Journal:

The scammers know how to delay confirmation that the cashier’s check is not good long enough to get the client trust account money into their own hands, says Ted Kitada, senior counsel for Wells Fargo & Co. They do that by changing the nine-digit MICR (magnetic ink character recognition) lines at the bottom of the check. The bank check may say Citibank, but the code recognizes the check as from, say, a Dallas financial institution.

“Wrongdoers deliberately put misinformation on the MICR line to cause the item to be misrouted,” says Kitada. “Misrouting causes a delay in the processing of the item.”

In defense of those attorneys who got conned, their practice sometimes includes international transactions (so the solicitation was not totally out of line). Also, their initial due diligence appeared to show that the overseas companies (Hong Kong, as reported) were legit.

The lesson: For any of you dealing with overseas payments by cashier’s check, beware. If you have to transfer any funds back overseas to a client, do not be pressured into returning the funds until you are absolutely, positively sure they are there . . .  and have had a few days to sit in your account quietly (without being returned).

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