Wednesday, August 22, 2018

A cautionary tale about an attempted fraud (updated, 11:25 am)

I was recently the target of a highly sophisticated legal-services fraud. Thankfully, this scam set off my Spidey sense from the beginning, and I did not fall for it. I'm sharing so that others can learn the lengths that some will go to steal from professionals. (My apologies in advance. This post is long, but I think it's worth your time.)

About a month ago I received an email from someone purporting to have been the victim of harassment and retaliation by his former supervisor and former employer (a Fortune 100 company).

As the story went, he was on business trip with his new female supervisor when she placed her hand on his thigh and propositioned him for sex. He refused, reported her to HR, and was swiftly fired. He forwarded me the email he sent to HR complaining about the harassment, and the letter from HR (on corporate letterhead) that fired him.

Could I help him, he asked?

From the beginning, I was skeptical. The language in the "official" corporate termination letter was … off. As if it was written by someone for whom English was not a first language.

But, I soldiered on. I typically don't sue employers, but I do negotiate potential claims for the right employees under the right circumstances. And this was a case where the facts, if true, begged for a quick and lucrative resolution.

Per his request I sent him a draft engagement letter, asked him for a not-small retainer, and set up a phone call to go over the facts. Before our call, I did some diligence on the potential client. The home address he provided for the engagement letter matched the property records of the local county in which he lived, but I could not find any record of him online, including on any social media sites. I took our call with some skepticism.

His story sounded convincing and compelling over the phone, and I told him that I would represent him, provided that he sign the engagement letter and pay the full retainer.

Here's where things got weird.

The retainer never arrived. Instead, within minutes of receiving the signed engagement letter via email, he sent a second email advising that as soon as he told the company he had engaged me, they caved and agreed to pay him two years' severance (yay for my reputation). A severance agreement followed by email, directly to me from the company's Executive Vice President for Human Resources (the name matched his LinkedIn profile; I checked). The severance agreement required that the company pay my firm (solely in our name) the full amount of the settlement; the client instructed that I deduct my fees from the amount and disburse the balance to him.

At this point, my Spidey sense was off the charts. I asked the VP of HR to put me in touch with someone in legal. He ignored that request, and instead provided me his cell phone number to call him. That was odd in and of itself. Also odd? That his email domain was not a one-to-one match for the domain of the company's URL. And that the area code of his cell phone was nowhere near the company's HQ or my client's home.

I emailed back to advise that no one was authorized to disburse any funds to my firm without my further written authorization.

I've yet to hear back. Nor will I.

I emailed the "client" to ask for confirmation that he was attempting to defraud me (with apologies if I was wrong). He hasn't responded. Moreover, his cell phone and the cell phone for the VP of HR are both no longer in service.

So what was the scam? I have an idea.

I believe they wanted me to deposit the funds from a bogus check into my firm's trust account, and then disburse the settlement proceeds (less our fees) to the "client" in the hopes that we'd do it before our bank discovered that their check was fake. By the time the bank, and we, discovered the scam, they'd be scot-free with our money. Click here, here, and here for more on these types of scams, known as "counterfeit check scams."

This scam was sophisticated. They had a compelling story, official looking documents (internal emails and termination letters), a believable severance agreement, and the names of real people.

Yet, there was enough to make me pause. The convenient timing of the settlement within minutes of my engagement, the ever-so-slightly broken English in the written documents, the wonky email domain and area code, and, finally, the payment terms and the refusal to put me in contact with an attorney.

I am so relieved I paused to suss this out. Because I would have hated to have to explain to my firm how those six-figures ended up leaving out bank account.

The internet is full of people looking to do you harm. My advice? Trust your gut. If something seems off it likely is. But, even if it's not, what's the harm in hitting the pause button to confirm one way or the other.

* Image by sik-life via Pixabay


I received via FedEx this morning a letter from the "VP of HR" enclosing a cashier's check for the full amount of the severance as "a final out of court settlement."

Within a half-hour, I also received an email from the (not my) "client" advising that the "settlement payment has been made" to me, and that I should "look out for this payment and deduct [my] fee."

I advised both that I am on to their scam, and that I'd be reporting them to the FBI's Internet Crime Complaint Center.

Case closed (for now).