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Personal Injury Lawyers in Southwest Virginia, Virginia, and Nationally

Law Firm and Bank Fall Victim to Phony Check Scam

Everyone Is Vulnerable!

A Virginia Law Firm and a Bank reached a settlement last month in which they shared (details are not

law firm and bank in phony check scam - Altizer Law

public) a loss of roughly $270,000. The Law Firm was duped by a business client in what turned out to be a scam.

What Happened

The Law Firm was contacted by someone claiming to be a seller of construction equipment overseas. The Law Firm agreed to assist in the sale of a large piece of construction equipment.

The Law Firm attempted to exercise due diligence in investigating the seller. The seller claimed to be employed by a foreign importer and trader in construction equipment. The sale was to be made to a rental company in a nearby town.

A representative of the law firm said that they checked out the websites for the companies reportedly involved in the transaction and called both companies to ensure that they were real entities. The attorneys from the firm insist that there were no warning signs of a scam.

Everything about communications from the seller was normal for the type of transaction involved. The firm handled transactions of this kind for people who were out of state or out of the country. The transaction was initiated with no unusual sense of urgency.

When contacted by the buyer’s “broker,” the Law Firm was advised that payment was about to be issued. The attorney insisted that payment be made by check and that the check be sent via mail.

When the check arrived, the attorney advised the “seller” that the Firm’s retainer would be deducted from the check and the remainder would be placed in a trust account. The check was deposited to the firm’s trust account. The check appeared to the attorney to be an authentic cashier’s check drawn on a major national bank.

The “seller” then tried to speed up the transaction and asked that the money be wired to him by the end of the day. He also indicated that, due to a family emergency, he would not be available to talk. The money from the sale was to be wired to two banks in another country.

The attorney went to the bank to arrange for the transactions, which were completed on the same day. Two days later, the bank notified the attorney that the check received from the buyer’s broker was counterfeit. The attorney went back to the bank to assist and ensure that stop requests were issues on both of the transfers. The attorney also reported the matter to the police and to the Law Firm’s insurance company. One of the transfers of funds was stopped. The other transfer had been completed – for roughly $270,000.

The Outcome

The Bank sued the Law Firm over the loss. The Law Firm resisted, insisting they exercised due diligence.

The matter was settled for an amount that is confidential to the parties involved.