How to avoid being duped by bad check fraud:

How to avoid being duped by
bad check fraud:
Dan Pinnington
Pinnington’s
s Show Notes
Digital Edge Podcast
July, 2012
Where emails to fraudinfo@lawpro.ca
originate*
3
Panama: 1
Portugal: 1
Czech: 1
Nigeria: 1
India: 1
Cyprus:2
Hungary:1
Romania:1
Barbados:2
Bali:1
Hawaii: 11
1
2
Mexico: 6
3
Argentina: 3
UK: 24
55
24
France: 5
10
5
Spain: 8
1,455
Holland: 7
33
Germany 7
Italy: 2
7
Bulgaria: 1
Ukraine: 3
Turkey: 4
12
166
Norway: 2
Sweden: 1
Malaysia: 2
Hong Kong: 1
Australia: 6
New Zealand: 1
18 7
4
14 24
27
Slovakia: 3
Finland: 4
3
3
5
Croatia: 1
3
5
65
59
45
42
56 28
3 2 15
4
29
17
8
5
3 1022
9
87
7
4
8
11
127
Fr. Polynesia: 2
Philippines: 1
Puerto Rico: 1
Poland: 1
© 2012 Lawyers’ Professional Indemnity Company
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33 (NJ)
44 (MA)
9 (CT)
1 (DE)
8 (VT)
8 (RI)
23 (MD)
11 (DC)
3 (NH)
Bahamas: 1
Virgin Islands: 2
1
1
45
*based on approximately
2,800 emails received from
January 2011 to June 2012
June
‘12
1
Sample fake ID documents
Sample fake passports
© 2012 Lawyers’ Professional Indemnity Company
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Sample fake checks
Sample documents
• A huge collection of fake IDs, documents and cheques given to
lawyers by fraudsters: http://avoidaclaim.com/?page_id=2395
• Collaborative Law Participation Agreement fraud documents
– Collaborative law participation agreement: http://avoidaclaim.com/wpcontent/uploads/2011/08/Masaru-Collaborative-Agreement.pdf
– Divorce decree: http://avoidaclaim.com/wp-content/uploads/2011/08/MasaruDivorce-Decree.pdf
– Settlement agreement: http://avoidaclaim.com/wpcontent/uploads/2011/08/Masaru-Settlement-Agreement.pdf
p
g
p
– “I’m sorry, I’m paying” letter http://avoidaclaim.com/wpcontent/uploads/2012/02/Brewer-cheque-cover.jpg
© 2012 Lawyers’ Professional Indemnity Company
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Sample documents (cont.)
•
•
•
•
•
•
•
•
Payment receipts http://avoidaclaim.com/wpcontent/uploads/2011/10/Chao-PHILIP-RECEIPT1.jpg
Verifications of identity http://avoidaclaim.com/wpcontent/uploads/2011/10/DLC-Solicitors.jpg
Company registrations http://avoidaclaim.com/wpcontent/uploads/2011/10/DVT-TRADING-LTD.-REGISTRATION.jpg
Invoices http://avoidaclaim.com/wp-content/uploads/2011/10/Liu-Lankominvoice.jpg
Bank statements http://avoidaclaim.com/wpcontent/uploads/2011/10/Kazuhiro-proof-of-funds.jpg
p
p
jpg
Powers of attorney http://avoidaclaim.com/wp-content/uploads/2011/10/LiuLankom-POA.jpg
Commercial letter of agreement: http://avoidaclaim.com/wpcontent/uploads/2012/06/Burger-agreement.jpg
Signed retainer agreement: http://avoidaclaim.com/wpcontent/uploads/2012/04/Zimmerman-retainer.jpg
Examples of multiple contacts
• Sample of a long, detailed back and forth
emailil conversation
ti with
ith a ffraudster
d t
http://avoidaclaim.com/?p=3052
• Another ongoing fraud conversation, this
one with a voice recording
http://avoidaclaim.com/?p 1780
http://avoidaclaim.com/?p=1780
© 2012 Lawyers’ Professional Indemnity Company
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The common red flags
• Initial contact email is generically addressed
(e g “Dear
(e.g.,
Dear attorney
attorney”)) and BCC’d
BCC d to many
people.
• The name in the sender email address and
name in the body of the email are different.
• Sender email address is different from email
address mentioned in body of the email
email.
• Client uses one or more email addresses from a
free email service (e.g., Gmail,MSN, Yahoo!),
even when the matter is on behalf of a business
entity.
The common red flags (cont.)
• Client raises issues of conflicts or payment of a
retainer.
retainer
• Domain name used in personalized email
address or website was recently registered
(check at WhoIs.net).
• IP address in metadata of email indicates sender
is in a geographic location that is different from
where he/she claims to be.
• Client is new to your firm.
• Client is in a distant jurisdiction.
© 2012 Lawyers’ Professional Indemnity Company
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The common red flags (cont.)
• Client shows up and wants the matter completed
around banking holidays
holidays.
• Client says they prefer email communication due
to time zone differences.
• Client provides only a cell number.
• Client is in a rush – and pressures you to “do the
d l” quickly.
deal”
i kl
• Client and others involved don’t seem
concerned if shortcuts are taken.
The common red flags (cont.)
• Client is willing to pay higher-than-usual fees on
a contingent
g
basis from ((bogus)
g ) funds yyou are to
receive.
• Despite the client stating a lawyer is needed to
help push for payment, the debtor pays without
any hassle.
q or bank draft arrives at yyour office in
• Cheque
plain envelope and/or without covering letter.
• Cheque is drawn from the account of an entity
that appears to be unrelated (i.e., a spousal
arrears payment from a business entity).
© 2012 Lawyers’ Professional Indemnity Company
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The common red flags (cont.)
• Payment amounts are different than expected or
change without explanation
explanation.
• Client instructs you to quickly wire the funds to
an offshore bank account based on changed or
urgent circumstances
– E.g., health issues, sick child
• Some or all of the payment is going to third party
that appears unrelated to the matters.
More information on fraud
• Check confirmed names of fraudsters and see samples
of real messages and documents from fraudsters on the
AvoidAClaim.com blog
• Use LAWPRO’s Fraud Fact sheet to educate your firm
staff and lawyers about these frauds and the red flags to
watch for
• Report suspicious matters to fraudinfo@lawpro.ca
• See more info on fraud at www.practicepro.ca/fraud
www practicepro ca/fraud
© 2012 Lawyers’ Professional Indemnity Company
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Contact Info
Dan Pinnington, BSc, LLB/JD
Vice President, Claims Prevention & Stakeholder Relations
Lawyers’ Professional Indemnity Company (LAWPRO)
Lawyers
Toronto, Ontario
(416) 598-5863 or 1-800-410-1013
dan.pinnington@lawpro.ca
www.practicepro.ca and www.lawpro.ca
Blogs:
g AvoidAClaim.com; slaw.ca
Connect with me:
– LinkedIn: Dan Pinnington
– Twitter: danpinnington
– Google+: Dan Pinnington
© 2012 Lawyers’ Professional Indemnity Company
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