The Alberta Lawyers Insurance Association (ALIA) has been notified by an Alberta law firm that they received an email from a Maki Kennedy looking to retain them to collect an overdue separation agreement payment. This is an example of a bad cheque scam that presents itself as a legal matter requiring the assistance of a lawyer.
The scammer, Maki Kennedy, claims to be out of jurisdiction (in this case, Japan) and contacts the law firm about enforcing payment from a separation agreement with her Canadian ex-husband. The scammer includes copies of a Decree of Divorce, the Separation Agreement and her passport to add validity to these claims. However, when contacted by the law firm, the ex-husband will pay the amount owed with little or no push-back.
The goal of the scam is to dupe lawyers into wiring real funds from their trust accounts to their new client (the scammer) after depositing the fake cheque received as payment from the ex-husband (who is part of the fraud). Later, the bank informs the law firm that the cheque is bad, retrieves the amount paid out, and the firm is left owing the money missing from their trust account.
Red Flags
Here are some red flags of a bad cheque scam.
- Despite the client stating a lawyer is needed to help push for payment, the debtor pays without any hassle.
- The client says they prefer email communication due to time zone differences.
- The client is in a rush and pressures you to do the deal quickly.
- The client is willing to pay higher-than-usual fees on a contingent basis from the (bogus) funds you are to receive.
- The client instructs you to quickly wire the funds to an offshore bank account based on changed or urgent circumstances.
Actions to be taken
If you or your law firm receive any request to handle a legal matter from a client who is from out of the country, consider the possibility that a fraudster is at work. To protect yourself:
- Follow these Client Identification and Verification Rules before taking on anyone as client.
- Hold the funds until your bank confirms the funds are “good” by contacting the bank that issued the cheque. Have your bank confirm, in writing, that it is safe to withdraw from the deposit. Even this may not be completely risk-free, as banks often reserve the ability to subsequently remove funds from your account.
We also recommend that your firm establish protocols for transferring trust funds and adhere to them.
If you receive communications that appear suspicious, please send an email to the
ALIAlert
mailbox
and, if possible, provide the potential fraudster’s contact information.
The Alberta Lawyers Insurance Association provides the ALIAlert service to all Alberta lawyers participating in the insurance program. If you believe that you have been targeted by potential fraudulent activity, please contact
ALIAlert
so that we may alert other members of the profession and avoid losses that increase the cost of everyone’s insurance.
