Fraudsters are going to great lengths to make their schemes appear legitimate, using sophisticated variations of client names, locations, fake documents and identification and back stories. Although there is no way to know what the next scam will look like, most demonstrate common patterns that if identified, can help prevent fraud and loss.

Red flags can be as simple as situations where little or no legal work is required but a large sum of money is expected to flow into your trust account, or spelling and/or grammar mistakes in communication by companies or individuals asking you to represent them. Don’t let the demands of an insistent client push you into something you are uncomfortable doing and until all of your questions are answered to your satisfaction.

Below is a list of red flags, which although they do not necessarily identify fraud, can be an indicator of problems or risk.

Possible Red Flags

Emails

• Generically addressed emails (“Dear attorney” or “Attention counsel”), emails that are sent to undisclosed recipients, or the use of the word attorney in the subject line or body of the email;
• Emails where the sender’s email address and the displayed name for that address are different;
• Emails that request a reply be sent to a person or email address that is different from the sender’s name or email address;
• Emails that give a referral source which wouldn’t have your name (a website that does not list you or a bar association you are not a member); and
• Individuals using a personal email account from AOL, MSN, Gmail or similar free email services who contact you to do work on behalf of a major corporation or business.

Clients

• Clients who insist that email is the only way to communicate due to time zone differences;
• The client is overseas, unknown to the company and pressures that you “make the case” quickly;
• Clients who renege or delay on promised payment of a retainer (when the bad cheque payment from the ex-spouse or loan advance arrives they will ask you to take payment from it);
• Clients who, without question or hesitation are willing to pay hourly rates, flat fees or contingency fees that are far higher than normal;

• Clients who insist on or who are not worried about shortcuts being taken;
• One or more delays in the payment or advance of funds (this is usually an attempt to create a sense of urgency to quickly disburse the funds when they finally do arrive);
• Debtors who seem overly anxious or who unexpectedly pay outstanding debts;
• Debtors who pay up without any hassle which is unusual given the client’s dire need to retain you in the first place;
• Request that sale proceeds be made payable from your trust account to a third party who is not connected to the transaction; and
• A client with no apparent connection to you, who compliments you on your “special expertise or qualifications”.

Payment/Received Cheque

• The issuer of the cheque or bank draft you receive doesn’t make sense given the type of payment (a payment of spousal support arrears by a cheque from corporation, charity or travel agency);
• The cheque or bank draft arrives from an address that doesn’t make sense, is in an envelope with a handwritten address and/or is without a covering letter;
• The payment or loan advance is not in the form you expected or requested and/or it is for an amount that is different than expected; and
• Unexpected or changed circumstances leading to the client wanting to wire funds off-shore to a third party on urgent basis for reasons not related to the legal matter you are handling.

More examples

• Bad Cheque Scam
• Real Estate and Mortgage Fraud