Story of a Scam, Foiled

Scam artists are increasingly sophisticated, and consumers and businesses are under siege.  Our law firm, like many businesses, is attacked by hackers multiple times a week.  This post describes a scam even simpler than breaking into a computer system, though. It involves an attempt to get me to voluntarily wire $148,000 to the scam artist.  Fortunately, my “spider sense” began to tingle early and I enjoyed watching the scam unfold.  It does, however, indicate how a seemingly innocuous request for services can lead you down the primrose path to a very expensive lesson.

It began with a form submission to our firm’s website requesting assistance in collecting severance pay.  The scammers had fairly skillfully fabricated the letterhead of a legitimate national corporation in the health care industry into a purported severance agreement dated some six weeks before the email.  The scammers even went so far as to fabricate an exchange of emails back and forth between my would-be client and his old employer demanding the severance payment he had been promised. He also provided a three year old offer letter from when he supposedly was offered the job.

Red flag number one:  The letterhead of the company only had the logo of the company and their slogan, and no address. 

Red flag number two:  The wannabe client lived out of state, but purportedly was negotiating the terms of his severance with the local Winston-Salem branch of the corporation.

These red flags had me alert, but not enough to cut off communications. After clearing conflicts within the firm (to insure that we could handle the case), I informed the client I would be glad to write a demand letter notifying the company that we would take action to enforce the severance provision if  the payment was not received by the end of the week.  The client quickly approved, signed, and returned my fee acknowledgement letter.  The client also approved the demand letter I had prepared, and I sent it out. No doubt he was smelling blood at this point!

Within a day (this being only four days from the initial contact from the client), the client informed me that his ex-employer had capitulated, and committed to making payment in full by the end of the week.  He sounded ecstatic, and told me that I could subtract my fees from the check when it arrived and send him the balance.

Red flag number three:  The solution and resolution to my work took place far too quickly, given that the client had waited six weeks from any action from the employer.

Red flag number four: The client not only quickly agreed to my fee structure, but authorized me to deduct whatever they came to, sight unseen, from the check arriving from his ex-employer.

I thereafter received confirmation from a person purporting to be the human resources officer for the corporation, apologizing and assuring me that the severance payment would be made by the end of that week.

As promised, that Friday (now one week from the initial contact from the client), an overnight letter arrived with the check. The letter was very explicit that the enclosed check was a “certified check” and “should be made available to you upon deposit”. Neither of those statements were technically true. Immediately after being informed of this, the client followed back up with wiring instructions for a bank I had never heard of with an unusual wiring address.

Red flag number five:  The company making the payment stressed how quickly the funds would be available from deposit of the check. 

Red flag number six:  The wiring instructions did not make sense for someone who supposedly lived in Kentucky.

The client now urged me to have the wire sent before 11:00 a.m. that very morning, and that the wire be done by swift with the highest wire fee, also to be deducted from the funds help.  He insisted he needed it for lab equipment to set up his own laboratory and asked me to forward the wire receipt.

Red flag number seven:  Isn’t this obvious?

At this point, it was very clear that something untoward was occurring.  I responded to the client that I apologized for my lack of confidence in him, but would not be distributing any funds until we received confirmation from the bank that the check had finally cleared.  I also informed him that it seemed fairly obvious to me at this point that he was attempting to scam me and if that was the case he could move along because it would not work.  I have not heard back since.

On the twelfth day after initial contact from the client, I received word that the check had been returned identified as fictitious.

The point of this post is not to say how brilliant I was to decipher this, but rather to highlight that we are all at risk in a world where scammers find it easier to trick someone out of their hard earned money than to earn it themselves.  Please be safe and cautious.  If it seems too good to be true, it probably is.

Peter Juran has practiced law for over 30 years and is a member of the North Carolina and Forsyth County bar associations. He is an experienced litigator and Certified North Carolina Mediator, providing regular guidance on decisions involving contracts, construction law, employee rights and duties, company control and management, trusts and estates, and all manner of civil litigation.