Pen with scanner

Scam artists are getting more creative and detailed in their attempts at defrauding law firms. I was recently the attempted target of such a scam. I received the following email purporting to be from the CEO of an Asian corporation looking for representation to review an intellectual property agreement in my jurisdiction. I verified that the CEO and the Asian corporation were real entities. Since the CEO and the Asian corporation are real, I have removed the identifying information from the email below.

Good Day Mr. Mark,

We have an Executory Intellectual Property agreement matter in your jurisdiction.

Please advise us on your standard retainer fee so that we can forward you the agreement for your review and run a conflict check.

Yours Sincerely,

{CEO NAME, COMPANY, ADDRESS, PHONE NUMBER, WEBSITE LINK}

The first tip-off that this may not be legitimate was that the email address from which the email was sent was from a gmail account, not a corporate account. The email address, however, was the CEO’s name. Since my law firm does a substantial amount of work with foreign companies and foreign law firms and the CEO and company appeared to be real entities, I responded to the email indicating that we set our retainer fee based on the particular matter so I would need additional information. Shortly after sending the response, I received the following email.

Thanks for your response Mr. Peterson,

We actually just want you to review the agreement and advise if there is any amendment. We also want to retain you to help complete the deal.

Below is the adverse party information and attached is a copy of the Intellectual Property Agreement for your review.

Please do run conflict check and advice us your initial retainer fee.

THE ADVERSE COMPANY INFORMATION:

{NAME AND ADDRESS OF REAL LOCAL COMPANY}

Please do forward us your Retainer Agreement Letter once conflict is cleared, then we shall advise on when payment shall be made. We look forward to working with you on this matter.

Awaiting your response.

Regards,

Lee

I noted the spelling error in the email (tip-off number two). Attached to the email was an intellectual property agreement for the sale of a Taiwan patent from the Asian company to the local company. The agreement was eight pages long and looked to be a real agreement. When I did an Internet search to find the Taiwan patent that was supposedly being sold, however, I could not find any indication that it was a real patent (tip-off number three). The listed information for the patent in the agreement also did not seem to be related to either company’s core business (tip-off number four). It also seemed odd that a U.S. company would be interested in purchasing a Taiwan patent (tip-off number five). I responded that I would perform the conflict check and get back to them.

Shortly after sending the response, I received the following email where the scam fully revealed itself.

Mr. Mark,

I actually just informed them ({NAME OF LOCAL COMPANY}) that we have an attorney "that might be" representing us at the moment to guide us through these whole process and We are happy to inform you that {NAME OF LOCAL COMPANY} has informed us that the first installment ($350,000) will be made to you soonest. This is the part payment for the exclusive right to be given to {NAME OF LOCAL COMPANY}.

We will need to sign your retainer agreement first before we give them the go ahead to send it to you less your retainer fee. So please once conflict is cleared, I need to know your retainer fee. Once I am ok with it, I shall sign ur engagement letter and authorize them.

Regards,

Lee

In addition to the poor spelling and grammar of a supposed CEO and that the first installment dollar amount did not match the first installment dollar amount listed in the agreement, a quick call to the local company supposedly involved in the transaction revealed that this was a fraud. A representative of the local company informed me that they had received phone calls from many law firms in Minnesota regarding the same scam and that the FBI was aware of the case. The representative also informed me that no one had yet fallen for the scam to their knowledge.

The third email revealed the scam as a fake check scam in which the law firm is sent a check for the amount in the agreement (which would be from the local company in this case), which the law firm deposits into its trust account. The supposed client then asks that the money, minus the law firm’s fee, be wired to the supposed client. By the time the check is determined to be fake, which may take several days, the law firm may have lost real client funds from their trust account, is liable to the bank for any overdraft of the trust account, and cannot recover the money wired to the supposed client.

In this case, the scammer impersonated a real person from a real company, provided an intellectual property agreement that at first look seemed legitimate, used a real local company, used my name in the emails, and the purported legal matter was in my practice area.

Other emails I have received for a similar scam (see below) did not use my name and/or were not in my practice area, thus quickly identified as fraudulent. In any case, be vigilant and investigate any suspicious potential clients to avoid being scammed and never transfer funds based on a received check until the check is verified as legitimate.

*****

Hello Counsel,

I want to inquire if your firm handles purchase agreements. A referral will be helpful if this is not your area of practice.

My company is in the process of selling a drilling rig to a company in your state. They agreed for us to employ a lawyer that will draw out a purchase contract which will protect our interest in this transaction.

I will send you details about the buyer for your conflict check if you are ready to move forward.

Regards,

Phillip Wilshire

*****

Hi,

We are Oil field Construction firm and we need an attorney to assist us in drafting a purchase and Sales agreement with a buyer in your area. Are you able to take this matter? If not, a referral will be appreciated.

Regards,

Herve LALLI

*****

Greetings,

My Company requires a litigation lawyer to handle a collection matter, I will also need a referral if this is not your line of practice.

Thank you as I look forward to your response soonest.

Sincerely,

Kiyoka Fukunishi

*****

We have Intellectual Property Agreement matter. Please advise if you are interested we shall forward you the agreement for your review and the other party information for your conflict check. A referral will be welcomed if this is not your area of practice.

Regards,

Wilson Choi

*****

Mark Peterson is a partner at Dicke, Billig & Czaja, PLLC.