A lawyer colleague forwarded me an email the other day, purportedly from an executive of a large Asian manufacturing company in need of legal assistance collecting bad debts in this jurisdiction. I was not surprised at all to find that the email was from a fraudster seeking to dupe a lawyer into sending money…uh…elsewhere.
I was reminded of my lunchtime conversation with a good friend who runs the charitable giving arm of a particular national disability organization in Toronto. The charity had received a donation cheque for 20,000 GBP in the mail and they were quite pleased and surprised by it. Our lunch date was on the auspicious date of September 11th – perhaps a good or bad omen.
The cheque had arrived without a cover letter and no one in the department had any inkling about its origins. However, it is a small department that reaches out to thousands of potential donors regularly so it may have just been the case that a donor had made use of an unconventional means for giving.
In any event, the charity was thrilled with the donation and deposited it to the appropriate account. As is usual for generous donations the charity reached out to the donor to say thank you.
Things started sounding odd when the erstwhile donor on the other end of the phone said the 20,000 GBP cheque wasn’t actually intended just for that charity, but to be divided up, by the charity, to go to several charities; another charity in Ontario, one in London, England, and one in … wait for it…Nairobi.
I said to my friend it is too bad such a big donation cheque was fraudulent; very disappointing for the charity. He looked rather incredulous and asked why I thought that.
I described to him the basics of the debt collection scheme in which a lawyer is contacted to collect on a debt. The creditor seems to be quite legitimate and armed with invoices and demand letters. The debtor quickly responds to the first demand from the lawyer and sends a certified cheque for the entire amount. On reporting to the creditor client the lawyer is told to take the very generous fees from the funds and immediately wire the balance, usually to an overseas account. Sometime after completing the transaction the lawyer is contacted by the bank and told that the certified cheque was fraudulent, and that the funds transferred overseas are long gone. The lawyer is out of pocket the amount of the funds transferred to the creditor client.
Charities and lawyers are ripe targets for fraud artists, as they have high volumes of funds transfers in and out of their bank accounts from a wide variety of sources making it easy to slide a run-of-the-mill transaction through their offices. By the time the fraud is detected the funds are gone and the money unrecoverable.
I received an email from my friend once he had returned to his office that he had alerted the bank to the possibility that this cheque is a fraud. A week or so later the bank reported back that the cheque was no good, and I felt particularly good about my charitable act of alerting him to the fraud. I wonder if I can get a tax receipt for that.
