Internet Scam: Lawyers Can Be Victims, Too

So many people who fall victim to internet scams feel shame and embarrassment and, frankly, they feel stupid. Like how could they have fallen for something like that. Here's a story to make you feel better.

Lawyers who warn clients against risky transactions are not supposed to get drawn in themselves.

But some are turning out to be easy prey for email swindlers using a sophisticated Internet scam that has bilked millions from law firms across North America, as the WSJ reported Monday.

The scheme isn’t new — essentially, scammers posing as would-be clients living abroad convince lawyers to cash counterfeit “settlement” checks, take a cut as attorney fees, then wire the balance to overseas bank accounts. The money is gone by the time the law firm’s bank figures out the check was fake.

Sounds pretty transparent, right?

But federal investigators say the scams are so elaborate — and targeted to mimic the way many lawyers now get online client referrals — that attorneys continue to fall for them.

In a first here in the U.S., an alleged ringleader of one such scam is set to go on trial this fall in U.S. district court in Pennsylvania. Federal prosecutors say Emmanuel Ekhator, a Nigerian national, bilked firms of at least $32 million that way. Mr. Ekhator, who prosecutors said was living in Canada at the time of the alleged frauds, has plead not guilty. His lawyer declined to comment.

Despite the publicity surrounding the Ekhator case — and numerous warnings over the years from law enforcement and bar associations — the victims continue to pile up.

“We have this wide-ranging scam that continues even though we have made these arrests,” said Christy H. Fawcett, an assistant U.S. Attorney in Harrisburg who is prosecuting the case. “We continue to have victims, both here and in Canada.”

Internet swindlers can reap much as $100,000 to $400,000 each time a law firm is duped, according to court records and federal law enforcement officials.

The schemes span the globe, authorities say. Scammers set up pop-up bank accounts in Asia that open and are closed before lawyers realize they’ve been had. Others blast out solicitation emails from Internet cafés in Nigeria and elsewhere that function as “boiler rooms” for the scam. Much of the activity is coordinated by scammers living in West African expatriate communities in Canada, Ms. Fawcett said.

“Many of them belong to a particular social club in Toronto,” Ms. Fawcett said. “They’ll hear this has been a good scam, this is a good bank account number in Asia.”

More indictments are pending for suspected co-conspirators of Mr. Ekhator who are currently in Canada and elsewhere. “There are a number of other individuals that are going to be indicted,” she said. “We are working with law enforcement in Nigeria and in Japan, and in Korea.”