The Grinch is not the only fraudster pretending to be someone they are not this time of year.

A Calgary firm reported being recently targeted by a bad cheque scam involving a corporate share acquisition. The attempted fraud was avoided through the firm’s diligence, which also revealed that the same scam had targeted an Edmonton firm. Another firm was hit by a gift card scam.

In the fraudulent corporate deal, a fraudster contacted a Calgary firm posing as a representative of the purported corporate client and provided a share acquisition agreement. The firm requested and received a signed engagement letter, with a promise to pay the retainer in the near future. The fraudster said the retainer would come from a related company with a different name. When asked to provide the name of the opposite party’s lawyer, the fraudster delayed, then provided the name of the opposite party’s “representative”, along with contact information. 

The firm advised the purported client that it would not act until the retainer was received and all client verification steps had been completed. The firm also conducted internet searches of the companies that were stated to be parties to the deal, and they appeared to be legitimate entities.

In the meantime, the purported representative of the opposite party forwarded a large cheque to the firm.

Fortunately, the firm investigated the validity of the cheque and the transaction. The funds were not certified and had not been delivered from a legal or corporate office. It was also unclear whether the “representative” who sent the cheque was, in fact, a lawyer. 

The firm contacted the corporate office of the opposite party to confirm the identity of the lawyer it had retained and learned that the opposite party was not engaged in any deal with the firm’s purported client. 

The firm had obtained contact information for the opposite party, independently of what was provided by the purported client, and in that way was able to bypass the fraudsters to confirm that the transaction was not legitimate. On learning that the deal was a fraud, the firm ceased all contact with the purported client/fraudster.  

This is a bad cheque scam that is presented as a legal matter requiring the service of a lawyer. These scams are designed to trick lawyers into wiring funds from their trust accounts to the seller after depositing a counterfeit cheque received as payment from the buyer, who is part of the fraud and often pretending to represent a legitimate company. After the lawyer sends the funds, the cheque is discovered to be bad, and the lawyer is left with a shortage in their trust account.

An explanation of typical bad cheque scams, including red flags and actions that can help firms protect themselves, can be found here.

In the gift card scam, an Alberta firm reported that one of their members received an email request from another firm member to purchase gift cards for clients. The display name in the email was correct, and the lawyer bought the gift cards. However, upon closer examination of the email address, the lawyer discovered the email address itself was incorrect. On seeing that the request was a fraud, the lawyer ceased communication with the scammer. It appeared the fraudster may have wanted codes from the gift cards. 

ALIA remains grateful to Alberta lawyers and firms for their continued reports of potentially fraudulent activities.

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If you believe you have been targeted by potentially fraudulent activity, please contact ALIAlert.